Stocks gain on quiet trading day

U.S. stocks gained and Asian shares sank to a ninemonth low as markets prepared for the implementation of fresh trade restrictions between America and China. Investors also assessed minutes from the most recent Federal Reserve meeting where officials affirmed the need for gradual interest rate hikes amid increasing trade risks.

All major equity benchmarks in the U.S. rose, with the Nasdaq indexes climbing more than 1 percent on strength in chipmakers. European automakers drove the continent’s stock markets higher on hopes of a trans-Atlantic tariff agreement.

“The risks are increasing, it’s becoming a bit of a bumpier ride, and I think there probably is some nervousness,” said James McCann, global economist at Aberdeen Standard Investments. “Tightening policy alongside building risks is a more difficult cocktail for them.”

Trading was quiet during the U.S. holiday week, with turnover on the S&P 500 Index and Nasdaq 100 more than 20 percent below normal for this time of day.

“A pretty quiet day today as a lot of people are still on vacation,” Matt Maley, an equity strategist at Miller Tabak & Co., wrote in an email to clients. “Those who are at their posts will be waiting to see tomorrow’s employment report and the reaction to the tariffs that will go into effect tomorrow, as well.”

The dollar fell as jobless data disappointed, and Treasuries were stable. The yuan declined. Commodities slid and those with heavy exposure to international trade were particularly pressured, with iron ore futures in Singapore hitting a seven month low. Oil slumped as inventories unexpectedly rose.

The trade conflict is poised to enter a new phase on Friday with the imposition of fresh tariffs between the world’s two biggest economies. China said it won’t be the first to act and will hold off on enforcement until the U.S. does. Investors are also preparing for the release of American jobs data on Friday.