The mere prospect of a U.S.-China trade deal is enough to send markets higher.

On Monday stateside, the S&P 500, Dow Jones Industrial Average and Nasdaq Composite closed at record highs — with the broader market index breaking past the 6,800 level for the first time.

And that’s before an agreement has been signed officially.

“A lot of the forecasts for technology have been without the benefit of China, so once you can add China back into the equation, that would probably be fairly optimistic for the markets,” Sam Stovall, chief investment strategist at CFRA Research, told CNBC.

Nvidia, for instance, gave an estimate for the current quarter that excludes H20 shipments to China — a reminder of how trade restrictions have complicated the outlook for U.S. tech giants.

A formal U.S.-China deal that clarifies — and perhaps loosens — trade parameters could prompt Big Tech companies to raise their guidance, potentially igniting another wave of buying in a market already dominated by tech heavyweights.

Beyond silicon and software, soybeans are back in play. Reports suggest China may ease its unofficial boycott of U.S. soybeans as part of the agreement. That would go some way toward assuaging Scott Bessent’s pain because he’s not just the U.S. Treasury Secretary, but also a soybean farmer, as he put it in a televised interview.

While Bessent meant that literally — he owns soybean farmland — in the broad trade war between China and the U.S., trade tensions have made daily life more difficult for most of us, turning us all into reluctant farmers of one kind or another. A truce, if it comes, might let everyone harvest some peace.

Trump suggests an agreement with China is imminent. Speaking aboard Air Force One on Monday, Trump said he and Chinese President Xi Jinping are going to “come away with” a trade deal. The U.S. president also signaled a TikTok deal could come on Thursday.

Amazon is preparing to announce largest layoffs in its history. The cuts, which will impact almost every division, will begin Tuesday, according to a person familiar with the matter. Up to 30,000 employees will be affected, Reuters reported.

HSBC beats earnings expectations. Third-quarter profit before tax came in at $7.3 billion, higher than the $5.98 billion estimate compiled by the bank. However, that figure was 14% lower from a year earlier because of higher operating expenses.

Record highs for U.S. stocks. The three major U.S. indexes and the Russell 2000 rose Monday to close at all-time highs. Asia-Pacific markets slipped Tuesday. South Korea’s Kospi fell even as the country’s economy expanded more than expected in the third quarter.

[PRO] Time to put cash elsewhere when Fed cuts rate. The returns of money market funds depend on prevailing interest rates. When the Fed all but certainly cuts rates, investors should start moving their funds out of cash instruments, analysts say.

How Saudi Arabia is diversifying away from oil — and betting big on AI

According to Saudi Arabia’s Minister for Investment Khalid Al Falih, 50.6% of the Saudi economy is now “completely decoupled” from oil.

The country is doubling down on fast-growing sectors such as artificial intelligence for growth. Al Falih said the kingdom will be a “key investor” in developing AI applications and large-language models, adding that Saudi Arabia would also build data centers “at a scale and at a competitive cost not achieved anywhere else.”

— Lim Hui Jie

ARK Invest CEO Cathie Wood on Tuesday pushed back on fears of an artificial intelligence bubble, while flagging the possibility of a “reality check” on AI valuations.

Speaking to CNBC’s Dan Murphy on the sidelines of Saudi Arabia’s Future Investment Initiative (FII) in Riyadh, Wood said that as interest rates begin to rise, “there will be a shudder” in markets.

“We are going to reach a moment in the next year where the conversation will shift from lower interest rates to rising rates,” the closely watched investor said.

“There are a lot of people out there … who think that innovation and interest rates are inversely correlated. That is not true over history,” Wood said.

“I want to disabuse people of that notion. But nonetheless, the way algorithms work these days, we think there will be a reality check, shall we say.”

Her comments come amid concerns of soaring tech valuations as both businesses and investors pour money into the sector.

Wood is one of many business leaders to have waded into the AI bubble debate, particularly as AI-driven spending has led to record deals and valuations.

Earlier in the month, the International Monetary Fund and Bank of England became the latest financial institutions to warn that global stock markets could be in trouble if investor appetite for artificial intelligence turns sour.

IMF chief Kristalina Georgieva offered some blunt advice to investors at the time: “Buckle up: uncertainty is the new normal and it is here to stay.”

She joined the likes of OpenAI’s Sam Altman, JPMorgan boss Jamie Dimon and Federal Reserve Chair Jerome Powell in warning about the risk of a stock market correction as AI spending surges.

Global markets rallied at the start of this week, with investors buoyed by hopes that the U.S. and China could soon reach an agreement on trade. U.S. stocks jumped to fresh records on Monday with Asian markets also seeing solid gains.

Investors are closely watching a number of key market catalysts, including Big Tech earnings and a Federal Reserve interest rate decision. The U.S. central bank is widely expected to cut rates for the second time this year.

OpenAI on Monday said the U.S. needs to substantially ramp up its investment in new energy capacity if it wants to stay ahead of China in the race to develop artificial intelligence.

The startup has been inking deals for ambitious infrastructure buildouts in recent months that will require massive amounts of power. The sprawling data centers will push the boundaries of what is possible in the U.S. during a time when the electric grid is already under strain.

“Electricity is not simply a utility,” OpenAI said in a blog post Tuesday. “It’s a strategic asset that is critical to building the AI infrastructure that will secure our leadership on the most consequential technology since electricity itself.”

OpenAI shared an 11-page submission with the White House Office of Science and Technology Policy, in which it encouraged the U.S. to commit to building 100 gigawatts of new energy capacity each year.

A gigawatt is a measure of power, and 10 gigawatts is roughly equivalent to the annual power consumption of 8 million U.S. households, according to a CNBC analysis of data from the Energy Information Administration.

OpenAI said that China added 429 gigawatts of new power capacity last year, while the U.S. added 51 gigawatts. The company said this disparity is creating an “electron gap” that is putting the U.S. at risk of falling behind.

“Electrons are the new oil,” OpenAI said.

WATCH: OpenAI begins to threaten software stocks