Stocks Open Higher on Hopes for U.S.-China Trade Progress
June 26 2019 - 10:14AM
Dow Jones News
By Will Horner
U.S. stocks climbed, boosted by hopes for progress toward a
U.S.-China trade deal.
The S&P 500 and the Dow Jones Industrial Average each gained
0.3% Wednesday. The tech-heavy Nasdaq Composite rose 0.8%.
The gains come after U.S. Treasury Secretary Steven Mnuchin said
in a CNBC interview that there is "a path to complete" a trade deal
between the U.S. and China. He also said that a deal had previously
been nearly done. President Trump and Chinese President Xi Jinping
are expected to meet at the G-20 in Japan later this week, in what
is seen by analysts as an important moment in the trade dispute
between the two nations.
The upward momentum in equities marked a reversal from Tuesday,
after Fed Chairman Jerome Powell defended the central bank's
independence, pushing back against signals from financial markets
and calls from President Trump to lower interest rates. Mr. Powell
said officials would ease monetary policy only if data showed a
sustained downward trend in the U.S. economy.
The comments from Mr. Powell and other Fed officials might have
been aimed at putting a "cold shower on markets" which were "very
heated up" about the prospect of a large cut in interest rates,
said Thomas Flury, Head of foreign exchange at UBS Global Wealth
Management.
Fed officials "wanted to prevent markets from running into too
much exuberance on the rate cut story...It's a game with
communication and playing with expectations to bring markets a bit
back into more reasonable ranges," he said.
The yield on the 10-year U.S. Treasury note recently rose to
2.017% Wednesday, from 1.994% Tuesday. Bond yields fall as prices
rise.
Oil markets rallied as the rhetoric between Iran and the U.S.
grew more confrontational and after data from an industry group
late Tuesday showed U.S. crude stockpiles had fallen by more than
expected. Global benchmark brent crude oil jumped 1.4% to $65.17
Wednesday, while U.S. benchmark West Texas Intermediate climbed
2.4% to $59.22 a barrel.
Bitcoin extended its record rise, breaking above $12,000 as
cryptocurrencies have benefited since Facebook said last week it
planned to launch its own digital currency. Bitcoin reached
$12,820.11.
Micron Technology soared 13% Wednesday after the memory chip
maker reported better-than-expected third-quarter results and said
Tuesday that it had resumed shipments to Huawei after determining
that they didn't run afoul of U.S. curbs on exports to the Chinese
telecom giant.
A four-day rally in gold prices halted, after propelling the
precious metal to its highest level since 2013. Gold fell Wednesday
0.4% to $1,412.90 a troy ounce.
Elsewhere, the Stoxx Europe 600 was roughly flat. Asian markets
were slightly lower or close to flat, with Japan's Nikkei posting
the largest decline of 0.5%.
(END) Dow Jones Newswires
June 26, 2019 09:59 ET (13:59 GMT)
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