GLOBAL MARKETS-Stocks hit record, dollar eases on US-China trade optimism

By Chuck Mikolajczak

NEW YORK, Oct 27 (Reuters) - Global stocks jumped on Monday to a fresh intraday record while the dollar eased on optimism a potential trade deal was on the horizon between China and the U.S., as investors awaited a slew of central bank policy meetings and earnings from several megacap companies.

Top Chinese and U.S. economic officials on Sunday hammered out the framework of a trade deal for U.S. President Donald Trump and Chinese counterpart Xi Jinping to decide on at a meeting in South Korea scheduled for Thursday.

Trump said he thought a deal would be reached with China and announced a flurry of deals on trade and critical minerals in Malaysia with four Southeast Asian nations during the first stop of a five-day Asia trip.

A trade deal would halt heavier U.S. tariffs and Chinese rare earths export controls, helping allay some worries among investors that a trade deal between the world's two largest economies could be in jeopardy.

On Wall Street, U.S. stocks were showing solid gains in the early stages of trading, with each of the three major indexes hitting fresh intraday records, led in part by gains in technology stocks, including a surge of 18% in Qualcomm QCOM.O shares after it unveiled two artificial intelligence chips for data centers, with commercial availability from next year,

"It's so hard to really say what's going to happen with the trade talks between the U.S. and China, there is nothing significant out there In terms of anything that's been decided, but there's hope that there'll be de-escalation of the issues so that's certainly part of it," said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York, New York.

"But you've got the Fed this week, everybody's thinking they're going to ease another 25 basis points and maybe they will, but big disappointment if they don't probably, and we're in the heart of earnings season."

Earnings are expected this week from "Magnificent Seven" heavyweights Microsoft MSFT.O, Alphabet GOOGL.O, Apple AAPL.O, Amazon AMZN.O and Meta Platforms META.O and investors will closely eye the results to see if they justify heightened valuations.

The Dow Jones Industrial Average .DJI rose 247.49 points, or 0.52%, to 47,454.61, the S&P 500 .SPX rose 60.89 points, or 0.90%, to 6,852.58 and the Nasdaq Composite .IXIC rose 344.72 points, or 1.48%, to 23,549.00.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 8.90 points, or 0.89%, to 1,010.27 and was on pace for its third straight session of gains, while the pan-European STOXX 600 .STOXX index rose 0.23%.

Argentina's Merval index .MERV shot up 369,661.83 points, or 17.80%, to 2,446,520.41 while its bonds and currency also surged after President Javier Milei's party won an overwhelming victory in a Sunday midterm election, a key requisite to keep economic reforms on track and a U.S. financial backstop in place.

The U.S. dollar weakened against the euro, Chinese yuan and Australian dollar on Monday as optimism over a possible U.S.-China trade deal boosted risk appetite and reduced demand for the greenback.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, shed 0.03% to 98.89, with the euro EUR= up 0.1% at $1.1636.

The Chinese yuan CNH= strengthened 0.23% against the greenback to 7.111 per dollar.

The yuan was also boosted by the People's Bank of China setting the official yuan midpoint rate higher than expected. Prior to the market open, it set the official yuan midpoint rate CNY=PBOC at 7.0881 per dollar, the strongest since October 15, 2024, and above a Reuters estimate CNY=RTRS of 7.1146.

Against the Japanese yen JPY=, the dollar strengthened 0.15% to153.06 while sterling GBP= strengthened 0.17% to $1.333 against the greenback.

Investors will also grapple with major central bank meetings this week including Japan, Canada, Europe and the United States.

The Federal Reserve is largely anticipated to cut interest rates by 25 basis points after data showed U.S. consumer prices increased slightly less than expected in September, but the government shutdown and its impact on data remain a concern. Market expectations for a rate cut of 25 basis points stand at 96.7%, according to CME's FedWatch Tool

The European Central Bank and the Bank of Japan are both broadly expected to hold rates steady later this week.

The BOJ is likely to debate whether conditions are right to resume rate hikes as worries about a tariff-induced recession ease, but political complications may keep it on hold for now.

In Treasuries, the yield on benchmark U.S. 10-year notes US10YT=RR rose 2.3 basis points to 4.02%, from 3.997% late on Friday.