Stocks jump as China’s president eases trade fight fears
NEW YORK — Stocks are rising sharply on Wall Street Tuesday after Chinese President Xi Jinping said Beijing would reduce tariffs on imported cars and improve intellectual property protection, steps that could ease tensions with the U.S.
Lower tariffs could mean better sales for U.S. car companies, while banks could also gain entry into the Chinese market. That sent automakers and financial companies higher.
Energy companies jumped along with the price of oil, a sign investors are getting more confident that the trade tensions won’t have a big effect on the global economy. Technology and industrial companies also rose.
“The market’s increasing expectation is that the two sides will sit down now,” said Paul Christopher, head of global market strategy for Wells Fargo Investment Institute. “There’s still a lot at stake because you have a global supply chain that could be interrupted because of tariffs.”
The S&P 500 index surged 46 points, or 1.8 per cent, to 2,659 as of 3 p.m. Eastern time. The Dow gained 453 points, or 1.9 per cent, to 24,432. Shortly before noon it rose as much as 532 points. The Nasdaq composite added 144 points, or 2.1 per cent, to 7,094. The Russell 2000 index of smallercompany stocks advanced 31 points, or 2.1 per cent, to 1,545.
Stocks had been on track for a similarly big jump Monday before a late slump wiped out most of their gains. The Dow rose as much as 440 points during the day, but finished just 46 points higher. Indexes overseas also climbed. Germany’s DAX jumped 1.1 per cent and the British FTSE 100 gained 1 per cent. The French CAC 40 gained 0.8 per cent. Japan’s benchmark Nikkei 225 gained 0.5 per cent and South Korea’s Kospi added 0.3 per cent while Hong Kong’s Hang Seng added 1.7 per cent.
Speaking at a business conference, Xi promised changes in areas that the U.S. has identified as priorities. He didn’t address other thorny topics, including requirements for foreign companies to give technology to potential local competitors.
General Motors rose 3.3 per cent to $39.07 and Ford rose 2.4 per cent to $11.52. Tesla climbed 5.4 per cent, to $305.25. Among banks, JPMorgan Chase gained 1.7 per cent to $112.31 and Citigroup picked up 1.8 per cent to $70.71.
Technology and industrial companies have made some of the biggest swings on the market during the trade spat. If the U.S. and China both place tariffs on imports from the other, industrials face greater costs as well as with lower sales. Technology companies might face manufacturing changes and slower growth in the global economy.