Wednesday's equity market rollercoaster—sharp pops and drops—was driven by conflicting reports on headlines surrounding potential U.S.-China trade talks. 

Markets surged after a Wall Street Journal report suggested President Trump considered cutting steep tariffs on Chinese imports. But sentiment quickly reversed when Reuters poured cold water on the claim. Further declines followed after Treasury Secretary Scott Bessent clarified there had been "no unilateral offer from Trump" to reduce Chinese tariffs and that a trade deal could take two to three years to finalize.

In the overnight hours, China demanded Washington remove unilateral tariffs before engaging in trade talks and rejected the claim that any negotiations had progressed.  

"The US should respond to rational voices in the international community and within its own borders and thoroughly remove all unilateral tariffs imposed on China, if it really wants to solve the problem," Ministry of Commerce's spokesman He Yadong told reporters at a regular briefing on Thursday in Beijing. 

Yadong rejected any signs of progress in bilateral communications, indicating that "reports on development in talks are groundless." He said Washington needs to "show sincerity" if both sides want to make a deal.

Ministry of Foreign Affairs spokesperson Guo Jiakun also called any rhetoric coming from the Trump administration about deal progress "fake news" in a press conference. 

The Trump administration's softening stance—reported by the WSJ, which sent US equity markets higher early Wednesday—may signal a willingness by the US to de-escalate the trade war with Beijing in order to shift to the negotiating phase.

Trump told reporters on Wednesday: "Maybe we'll make a special deal, and we'll see what it will be. Right now, [the tariffs are] 145%, that's very high." 

One day earlier, Treasury Secretary Bessent told investors at a closed-door meeting: "No one thinks the current status quo is sustainable, at 145% and 125%, so I would posit that over the very near future, there will be a de-escalation. We have an embargo now on both sides."

Alfredo Montufar-Helu, senior adviser at The Conference Board's China Center, told the Shanghai Morning Post that "news today confirms China has no intention to reach out first with a proposal of its own."

"The impasse in negotiations is driven by a very simple dynamic; no side wants to bear with the political costs of being seen as capitulating to the other side," Montufar-Helu explained. 

According to Zhang Zhiwei, chief economist at Pinpoint Asset Management, even if the negotiations between China and the US start immediately, reaching an agreement could take time, and mounting risks exist. The tariff war on both sides could soon unleash pain across global trade. 

"It takes time for trade negotiations to proceed between the US and other countries. This means the tariffs will hit global trade and economies for at least several months. It is not clear to what extent inventory build-up and pre-loading of trade in the past few months will help to soften the immediate damage. The question now is how bad trade and other macro data will be in China, the US and other countries," Zhiwei said. 

The economic trade storm brews: 

Bloomberg reported last week that Beijing wants to see several things from Trump's administration before trade talks begin, such as more respect and naming a point person for the dialogue. 

Neither side has announced any upcoming bilateral trade meetings despite Trump's announcement this week to ease tariffs potentially.