Is U.S.-Mexico deal a sign of trade war thaw?

Could a tentative trade deal reached by the U.S. and Mexico be a signal that negotiations with other trading partners have a better chance of success?

Indeed, investors who want to know how financial markets could react to any big thaw in the trade war need look no further than the Dow Jones Industrial Average, which soared nearly 260 points, or 1 percent, Monday, and rose another 15 points Tuesday. And broader U.S. stock market gauges, including the Standard & Poor’s 500 stock index and Nasdaq composite, both closed at record highs again Tuesday.

“It’s obviously a plus and demonstrates that while (President Donald) Trump’s rhetoric has been harsh toward Mexico, he has been able to fashion a deal he can sign,” says Tom Block, a Washington policy analyst at New Yorkbased financial research firm Fundstrat Global Advisors.

But Block and other Wall Street pros also stress that the successful talks with Mexico offer no assurances the same outcome will occur in trade disputes with China, Europe or Canada, nor does it ensure that Congress will vote in favor of the Mexico deal.

While Wall Street would like to view the deal as a template for how trade talks with other countries will play out, they’re skeptical that other fights can be resolved as easily, even though it will put more pressure on Canada and China to get deals done with President Trump.

“It’s worth remembering that every trade deal is different,” Craig Erlam, senior market analyst at currency trading firm OANDA, told USA TODAY. “I think this is a step forward, albeit a small one.”