Trump Comments About Trade Talks Lead To Rebound On Wall Street
(RTTNews) - Stocks showed a strong move to the upside in early trading on Monday and remained firmly positive throughout the session. With the upward move on the day, the major averages partly offset the steep losses posted last Friday.
The major averages moved to the upside going into the close, finishing the session near their best levels of the day. The Dow jumped 269.93 points or 1.1 percent to 25,898.83, the Nasdaq soared 101.97 points or 1.3 percent to 7,853.74 and the S&P 500 surged up 31.27 points or 1.1 percent to 2,878.38.
The early rebound on Wall Street came as President Donald Trump continued to express optimism about a potential U.S.-China trade deal despite the ever-escalating trade war.
Trump told reporters at the G-7 summit in France that top Chinese officials had called asking for the resumption of trade talks.
"China called, last night, our top trade people, and said, 'Let's get back to the table.' So, we'll be getting back to the table. And I think they want to do something," Trump said.
"They've been hurt very badly, but they understand this is the right thing to do. And I have great respect for it. I have great respect for it. This is a very positive development for the world," he added.
However, Chinese Foreign Ministry spokesman Geng Shuang said he was not aware of any call between U.S. and Chinese officials and Trump refused to provide details.
It is worth noting that Trump routinely makes optimistic remarks about U.S.-China trade talks even as he continues to escalate the dispute between the two economic superpowers.
Trump once again ramped up the trade war after the close of trading last Friday by announcing plans to raise the rate of tariffs previously imposed on Chinese imports.
A 25 percent tariff on approximately $250 billion worth of Chinese imports will be raised to 30 percent beginning October 1st, while the 10 percent tariff on the remaining $300 billion worth of Chinese imports that Trump announced earlier this month will now be 15 percent. The increase in the tariff rates came after China announced plans to impose news tariffs on $75 billion worth of U.S. imports, which Trump called "politically motivated."
Trump said on Twitter that he is ordering U.S. companies to start looking for alternatives to doing business with China and has suggested he could declare a national emergency to force companies to change their businesses practices.
On the U.S. economic front, the Commerce Department released a report showing a continued spike in orders for transportation equipment contributed to a bigger than expected jump in durable goods orders in the month of July.
The report said durable goods orders surged up by 2.1 percent in July following a downwardly revised 1.8 percent increase in June. Economists had expected orders to climb by 1.1 percent compared to the 1.9 percent jump that had been reported for the previous month.
Excluding the spike in orders for transportation equipment, however, durable goods orders fell by 0.4 percent in July after rising by 0.8 percent in June. The pullback came as a surprise to economists, who had expected ex-transportation orders to inch up by 0.1 percent.
Telecom stocks showed a significant move to the upside on the day, driving the NYSE Arca North American Telecom Index up by 1.6 percent.
Significant strength also emerged among software stocks, as reflected by the 1.5 percent gain posted by the Dow Jones U.S. Software Index.
Utilities stocks also moved notably higher over the course of the session, with the Dow Jones Utility Average climbing by 1.3 percent.
Healthcare, retail and transportation stocks also saw some strength on the day, moving higher along with most of the other major sectors.
In overseas trading, stock markets across the Asia-Pacific region moved sharply lower during trading on Monday. Japan's Nikkei 225 Index plunged by 2.2 percent, while China's Shanghai Composite Index tumbled by 1.2 percent.
Meanwhile, the major European markets moved to the upside on the day, with the U.K. markets closed for a holiday. The German DAX Index and the French CAC 40 Index climbed by 0.4 percent and 0.5 percent, respectively.
In the bond market, treasuries showed a lack of direction for much of the session before closing modestly lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.7 basis points to 1.545 percent.
Further developments on the trade front may attract attention on Tuesday, with traders also likely to keep an eye on a report on consumer confidence in August.