By Ryan Vlastelica

S&P 500 on track for seventh rise of past eight sessions

U.S. stocks rose in early trading on Wednesday, in the latest example of investors ignoring escalating tensions between the U.S. and China on trade policy to focus instead on improving economic fundamentals.

The day's gains were widespread, with nine of the 11 primary S&P 500 sectors higher on the day. Material and financial stocks were among the biggest gainers, up 0.9% and 0.5%, respectively.

Where are the major benchmarks trading?

The Dow Jones Industrial Average rose 112 points, or 0.4%, to 26,356, leaving it within 1% of its all-time high. The S&P 500 added 5 points to 2,909, a gain of 0.2% that put it just 0.2% below record levels. The Nasdaq Composite Index climbed 0.1% to 7,964, a rise of 7.5 points.

If the S&P ends in positive territory, that would mark its seventh rise of the past eight sessions.

Read more about the low volatility on Wall Street (http://www.marketwatch.com/story/what-trade-fears-us-stock-investors-are-extremely-calm-2018-09-18)

What's driving market activity?

Trading on Wall Street has been relatively quiet given that earnings season is largely over and there have been few major economic indicators released this week. That has left an opening for markets to be driven by the latest developments on trade.

On Tuesday, President Donald Trump reiterated his hard-line stance on China during a news conference with Polish President Andrzej Duda and said the U.S. had "no choice" but to levy another $267 billion in duties on China. That would come on top of announced tariffs on about $200 billion in Chinese goods announced late Monday; Trump also threatened additional penalties as part of his campaign to pressure Beijing to change its commercial practices.

In response, China retaliated with tariffs of 5% to 10% on $60 billion worth of U.S. products (http://www.marketwatch.com/story/china-retaliates-with-tariffs-on-60-billion-of-us-goods-2018-09-19) that will take effect Sept. 24 and said it may introduce more measures if the U.S. goes ahead with higher tariffs.

Jack Ma, the founder of Alibaba Group, said a trade war between the U.S. and China could last "maybe 20 years" (http://www.marketwatch.com/story/china-us-trade-war-will-last-for-maybe-20-years-says-chinas-best-known-ceo-2018-09-18) and that "it's going to be a mess."

While many are concerned that a full-blown trade war will become a huge headwind to global economic growth, investors have repeatedly shrugged off the issue over the past several months, choosing instead to focus on signs of improving economic fundamentals.

Read more: How trade-war fears have become less of a factor for stock-market investors (http://www.marketwatch.com/story/how-trade-war-fears-have-become-less-of-a-factor-for-stock-market-investors-2018-09-18)

Don't miss:Investors load up on U.S. stocks while growing cautious about the rest of the world, survey shows (http://www.marketwatch.com/story/investors-load-up-on-us-stocks-while-growing-cautious-about-the-rest-of-the-world-survey-shows-2018-09-18)

In the latest economic data, the U.S. current-account deficit, a measures of the nation's debt to other countries, fell 17% in the second quarter (http://www.marketwatch.com/story/us-current-account-deficit-sinks-17-2018-09-19).

What are market analysts saying?

"We could be near peak political trade rhetoric, but without any visible effect on economic data, investors are just looking through the noise. We're essentially still in a negotiation phase, and until we have set policies that we can evaluate, markets will continue to ignore this to a certain extent," said Matt Forester, chief investment officer of BNY Mellon's Lockwood Advisors.

"The U.S. environment remains very positive, and there's a big difference between the sensitivity of the stock market to trade -- which is most important to large U.S. stocks -- and the sensitivity of the overall economy."

What stocks are in focus?

Business-software vendor SAP SE(SAP.XE) said it would expand its partnership (http://www.marketwatch.com/story/sap-and-alibaba-to-expand-partnership-2018-09-19-54853524) in online platform services with Alibaba Group Holding Ltd. (BABA). U.S.-listed shares of SAP fell 1% while Alibaba rose 2.8%.

Microsoft Corp.(MSFT) late Tuesday said it was raising its quarterly dividend (http://www.marketwatch.com/story/microsoft-board-hikes-quarterly-dividend-by-nearly-10-2018-09-18) by nearly 10%. The stock fell 0.5%.

Related: Microsoft tries to steal Salesforce's thunder with new AI, mixed reality offerings (http://www.marketwatch.com/story/microsoft-tries-to-steal-salesforces-thunder-with-new-ai-mixed-reality-offerings-2018-09-18)

Bayer AG(BAYN.XE) is stepping up the legal defense of its flagship weed killer (http://www.marketwatch.com/story/bayer-takes-defense-of-weed-killer-a-step-further-2018-09-19), after a verdict in a recent case alleging the chemical causes cancer sent shares down sharply and raised the prospect of costly plaintiff payouts. Shares rose 0.6%.

LyondellBasell Industries NV(LYB) shares fell 0.8% after J.P. Morgan turned bearish on the chemical company, citing the recent sharp rise in feedstock costs.

Shares of Command Security Corp. (MOC) acquired by Spain-based Prosegur SA Compania de Seguridad for $28.9 million.

The stock of Molecular Templates Inc.(MTEM) jumped 61% after it announced a joint-development partnership (http://www.marketwatch.com/story/molecular-templates-stock-soars-after-development-deal-with-takeda-2018-09-19) with Japan-based Takeda Pharmaceutical Co. Ltd(4502.TO)

Tilray Inc. shares jumped 19%, building on a rally of almost 30% in the previous session that came after the U.S. Drug Enforcement Administration signed off on a plan (http://www.marketwatch.com/story/tilray-to-import-cannabis-to-us-for-clinical-trial-2018-09-18) for the cannabis cultivator to import a marijuana product from Canada to test its effectiveness at treating a disorder that affects millions of Americans. The stock has been an trading favorite this past month, as investors bet that stocks related to marijuana could see massive growth. Tilray has surged more than 400% over the past month.

What are other markets doing?

Asian stock markets rose as Japanese stocks jumped further (http://www.marketwatch.com/story/nikkeis-surge-leads-asian-market-gains-2018-09-18) amid added gains for dollar-yen and bond yields and Chinese stocks shrugged off new tariffs. The Bank of Japan reiterated that it would keep interest rates extremely low "for an extended period (http://www.marketwatch.com/story/bank-of-japan-vows-to-keep-rates-very-low-for-an-extended-period-2018-09-18)," holding to forward guidance it first introduced in July.

Crude oil was flat on the day, while gold prices rose 0.4%. The U.S. dollar index dipped 0.2%.

(END) Dow Jones Newswires

September 19, 2018 09:53 ET (13:53 GMT)

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