Plans for new U.S.China trade talks boost stock indexes

Investors powered U.S. stocks to broad gains Thursday, cheering plans for another round of trade negotiations between Washington and Beijing, and drawing encouragement from a batch of positive economic data.

The Dow Jones Industrial Average surged nearly 400 points, bond yields jumped and the price of gold fell as investors regained a bigger appetite for riskier holdings.

Markets have been rattled this summer as the longstanding trade war between the U.S. and China escalated. Past rounds of negotiations have failed to yield progress. Even so, news Thursday that envoys from Washington and Beijing plan to hold talks next month elicited fresh optimism on Wall Street that the world’s largest economies may yet find a way to resolve their costly trade war.

Investors have been worried that uncertainty over the conflict and the fallout from tariffs goods imposed by both sides will exacerbate a slowdown in global economic growth and hurt corporate profits.

Still, it’s going to take more than news of planned talks to give the market more than a shortterm boost after more than a year of trade angstfueled market volatility, said Willie Delwiche, investment strategist at Baird.

“We’ve seen headlines on trade so many times,” Delwiche said. “It’s kind of hard to believe that this news of talks is going to be somehow different from previous news of talks and yield something meaningful in terms of a deal or some sort of progress.”

The S&P 500 gained

38.22 points, or 1.3 percent, to 2,976. The benchmark index is now 1.7 percent shy of its most recent alltime high set in late July.

The Dow rose 372.68 points, or 1.4 percent, to 26,728.15. The average was briefly up by 480 points.

The Nasdaq climbed 139.95 points, or 1.8 percent, to 8,116.83. Traders also favored smaller company stocks. The Russell 2000 index picked up 25.99 points, or 1.8 percent, to 1,510.75.

Thursday’s rally took its cue from overseas markets, which also reacted positively to the news that negotiators from the U.S. and China have agreed to meet in early October.

The meeting would be the latest attempt to find a resolution to a trade war that has rattled global financial markets and threatened economic growth.

There has been no sign of progress in the trade conflict since Presidents Donald Trump and Xi Jinping agreed in June to resume deadlocked negotiations about trade and technology.

Negotiations between the world’s largest economies have been tenuous and the trade war has been escalating with expanded tariffs on each other’s products.

The latest escalation kicked in Sunday, with the U.S. imposing 15 percent tariffs on $112 billion of Chinese imports. Washington is planning to hit another $160 billion on Dec. 15, a move that would extend penalties to almost everything the United

States buys from China. Beijing responded by imposing duties of 10 percent and 5 percent on a range of American imports.

U.S. tariffs of 25 percent imposed previously on $250 billion of Chinese goods are due to rise to 30 percent on Oct. 1.

Stocks were also bolstered Thursday by positive economic data showing that companies are still hiring at a solid pace and that productivity rose at a healthy rate last quarter.

Payroll processor ADP reported that U.S. businesses added 195,000 jobs in August, well above economists’ expectations.