Stocks Jump as US-China Announce Beginnings of a New Trade Deal
Stocks closed sharply higher as the U.S. and China reached a partial deal on trade and said they would continue negotiating and more in Friday’s Stock Market Update.
President Donald Trump agreed to suspend an increase in tariffs on $250 billion in Chinese goods due to kick in Oct. 15. In exchange, China agreed to boost purchases of U.S. farm products.
The two countries are leaving the thornier issues — including U.S. allegations that China forces foreign countries to hand over trade secrets in return for access to the Chinese market — until later negotiations.
Technology and industrial companies led the gains.
STOCK MARKET UPDATE
KEEPING SCORE: The Dow Jones Industrial Average rose 319 points, or 1.2%, to 26,816, although the index was up 500 points just as Trump announced the deal. The president did not mention any action regarding $160 billion in tariffs set to go into effect on Dec. 15.
The S&P 500 rose 32 points, or 1.1%, to 2,970. The Nasdaq rose 106, or 1.3%, to 8,057.
Bond prices fell. The yield on the 10-year Treasury jumped to 1.73%.
EUROPE TOO: Stocks jumped across Europe on hopes that the United Kingdom and European Union can reach a trade deal ahead of London’s pending exit from the bloc.
The United Kingdom is set to leave the European Union on Oct. 31, and analysts say a departure without a trade deal in place could rock markets and economies across the region.
The German DAX surged 2.9%, while the CAC 40 in France jumped 1.7%. The FTSE 100 in London rose 0.8%, held back in part by a stronger British pound, which adds pressure on British exporters.
ENERGY: A missile strike on an Iranian tanker revived oil supply concerns and pushed energy prices higher. Benchmark U.S. crude rose 2.1%. Brent crude, used to price international oils, was flat after giving up an early gain.
The explosion follows other attacks earlier this year on tankers in the Persian Gulf, through which about 20% of all oil traded worldwide passes.
The rise in energy prices lifted oil and energy services companies. Exxon rose 1% and Schlumberger climbed 4.5%.
TIGHT SCREWS: Fastenal surged 17.3% after the maker of fasteners and other industrial products reported surprisingly good first quarter profit and revenue. The company reported solid growth from its industrial vending and onsite services businesses.
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