US STOCKS-Wall Street muted as investors track progress of US-China trade talks

By Noel Randewich and Sukriti Gupta

June 10 (Reuters) - The S&P 500 climbed on Tuesday, lifted by Tesla's gains as investors awaited results from U.S.-China trade talks aimed at defusing a tariff dispute that has roiled global markets this year.

Wall Street is betting on improved trade terms after relief from a preliminary deal struck last month was overshadowed by Washington's allegations that Beijing was blocking exports of rare earth minerals critical to the aerospace, semiconductor and defense sectors.

The U.S. stock market has rallied in recent weeks, recovering from an April slump sparked by U.S. President Donald Trump's "Liberation Day" sweeping global tariffs.

With investors betting the United States will reach trade agreements that reduce Trump's steep trade barriers, the S&P 500 is now trading just below its February record highs.

"The expectation is that they'll figure this out, and that the Liberation Day tariff levels are never going to be seen. You can't get to market valuations where we've got them and have those tariff levels get anywhere close to reality," said Scott Ladner, chief investment officer at Horizon Investments.

Shares of Wall Street's most valuable companies were mixed. Tesla TSLA.O added almost 4%, while Microsoft MSFT.O slipped 0.7%.

Alphabet rallied 2% after Reuters reported that OpenAI plans to add Alphabet's Google cloud service to meet its growing needs for computing capacity.

The S&P 500 was up 0.36% at 6,027.71 points.

The Nasdaq gained 0.29% to 19,648.71 points, while the Dow Jones Industrial Average was up 0.26% at 42,871.41 points.

Of the 11 S&P 500 sector indexes, 10 rose, led by energy .SPNY, up 2.21%, followed by a 1.3% gain in healthcare .SPXHC.

Investors are awaiting U.S. consumer prices data on Wednesday for clues to the Federal Reserve's rate trajectory.

The World Bank slashed its global growth forecast for 2025 by 0.4 percentage point to 2.3%, saying higher tariffs and heightened uncertainty posed a "significant headwind" for nearly all economies.

Insmed shares INSM.O jumped 27% after the drugmaker said its experimental drug significantly reduced blood pressure in the lungs and improved exercise capacity in patients in a mid-stage study.

J.M. Smucker's SJM.N shares tumbled 15% and were set for their worst day on record after the Jif peanut butter maker forecast annual profit below estimates.

Snap SNAP.N was last up 1.7% after the social media platform said it would launch its first-ever smart glasses for all consumers next year, ratcheting up competition with Meta META.O in the wearable technology market.

Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX by a 2.1-to-one ratio.

The S&P 500 posted 10 new highs and two new lows; the Nasdaq recorded 66 new highs and 37 new lows.