Stocks are poised for another record-breaking day as China spurs trade hopes
It could be another record-breaking day in the US stock market, after a Chinese official said that Washington and Beijing have discussed rolling back tariffs.
A spokesman for China’s Ministry of Commerce told reporters these roll-backs could happen even before a “phase one” trade deal is signed. The United States and China agreed a preliminary deal in mid-October.
Investor sentiment rebounded on the back of the comments. On Wednesday, markets were more or less flat after a Reuters report warned that the signing of the preliminary agreement could be delayed.
The Dow and the S&P 500 opened at fresh intraday record highs. The Dow was last up 210 points, or 0.8%, while the broader S&P was up 0.6%. The Nasdaq Composite climbed 0.7%, and also hit a trading record high within the first half hour of the market opened.
Gains were broad across industries, with only four Dow stocks in the red in morning trading. The energy and industrial segments were best performing in the S&P.
“For almost two years now, the US/China trade tussle has posed the biggest headwind to global growth. But with promising signs of progress on the trade front, a shift in global central banks to easing (including three consecutive rate cuts by the Fed this year), and mostly better-than-expected corporate profits, US stocks were pushed to all-time highs,” wrote Priscilla Thiagamoorthy, economic analyst at BMO.
All three major stock indexes could close at fresh record highs on Thursday. It would be the third record of the week for the Dow and the Nasdaq.
Safe haven assets like Treasury bonds and gold, which increase in appeal during times of uncertainty and volatility, are down on Thursday.
The 10-year Treasury yield is up at 1.899%, implying weaker demand for the government bond. Bond yields and prices move opposite to one another.
Gold prices dropped 0.4%, to $1,484.40 an ounce.