China-U.S. Tariff Cut Lifts Big Tech to a Record as Rising Yields Punish Dividend Stocks

On September 25, 2026, the United States and China agreed to cut tariffs (taxes governments place on imported goods) on each other's products by $30 billion and to open a new round of talks on artificial intelligence. The move followed the recent Trump-Xi summit, after which China also locked in purchases of U.S. coal through 2028. The de-escalation fed a rally in mega-cap technology shares: an exchange-traded fund (a basket of stocks that trades as a single security) tracking the seven largest U.S. technology companies, known on Wall Street as the 'Magnificent Seven,' closed above the record it had set in May. That was the clearest sign investors treated the trade truce as removing a risk that had been capping the sector. The optimism did not carry over to income-focused shares. When Treasury yields, the interest rate the U.S. government pays to borrow, rise, they make government bonds a more attractive, safer alternative to dividend-paying stocks, whose payouts now have to compete with a higher risk-free return. That mechanism showed up clearly in the market: PepsiCo, a longstanding dividend payer, was down 10% for 2026 even as the S&P 500, the index of America's 500 largest listed companies, was up 13% over the same stretch. In INDY's own Buy List 2026 model portfolio, Vonovia, the German residential landlord whose earnings depend heavily on financing costs, was down 28.64%, the single worst performer in the book. Adding to the squeeze, U.S. consumer sentiment fell again in September, and a firmer dollar pressured emerging-market bonds. A stronger dollar raises the local-currency cost of the dollar-denominated debt that many developing countries carry, pushing investors to demand higher yields or sell those bonds outright. Underneath the record highs, insiders kept selling. Executives at CrowdStrike, C3.ai and Fastly all cut stakes, and a separate wave of sales hit Medpace, Datadog and Reddit. The pattern showed up across the wider market too: Lumentum's president, Wupen Yuen, sold $928,000 in company stock, NextNav's chief financial officer, Timothy Gray, sold $162,538, and its chief operating officer, Susan Brasse, sold $33,701. None of these sales alone signals trouble, but the breadth of it, across chip, cloud, data-center and biotech names alike, suggested executives were using elevated prices to diversify rather than buying to signal confidence. The biggest question left unresolved sits in the Middle East. Iran stayed silent on a proposed plan for the Strait of Hormuz, the narrow waterway between Iran and Oman that much of the world's oil tanker traffic passes through, which kept an oil risk premium, the extra price built into crude to compensate for the danger of a supply disruption, alive in the market. President Trump rejected an Iranian ceasefire offer and threatened renewed strikes after the midterm elections. Adding to the tension, China reportedly sent over 1,000 shipments of missile and drone parts to Iran during 2026, and Iraqi airports halted all Iranian flights. Separately, Boeing disclosed a new software flaw in the 737 MAX tied to its automated navigation system, leaving regulators' response as another open thread. What resolves the bigger risk is either an Iranian answer on Hormuz or clarity on when, or whether, U.S. strikes follow the midterms. INDY's Buy List 2026 model portfolio, which started the year with €120,000 invested, closed the session at €127,925, a total return of 6.60% (6.04% on price alone, before dividends). That trailed the S&P 500's 13% gain for the year, a gap driven by the portfolio's rate-sensitive laggards, Vonovia at -28.64% and Novo Nordisk at -16.86%, which offset strong gains in MicroStrategy, up 65.44%, and GameStop, up 25.74%.