Stocks surge; fears of trade war ease

Stocks surged after concil- iatory comments from President Donald Trump and Chinese President Xi Jinping aimed at releasing some pressure from the trade tensions between the world’s biggest economies. Treasuries fell with the dollar. Major U.S. equity indexes spiked higher Tuesday after- noon following Trump praise of Xi’s “kind words on tariffs and automobile barriers.” Earlier, in a keynote address before the Boao Forum for Asia, China’s leader backed free trade and dialog to resolve dis- putes the nation’s and pledged banking to open and auto manufacturing sectors. With the newly friendly tone, investors began weighing whether fears of an outright trade war had become overblown. That, in turn, reinvigorated faith in the synchronized global-growth story ahead of earnings season, even after a Federal Reserve official cautioned that the spat won’t be resolved soon. Stocks continued their advance despite a midday hiccup when additional revelations arose about Monday’s raid on the office of Trump’s personal lawyer, Michael Cohen, by the Federal Bureau of Investigation. “Without the underlining dynamism of momentum in the markets and supported by improving fundamentals, there is going to be a tendency for the market to be knocked around by headlines,” said Kevin Caron, a senior portfolio manager at Washington Crossing Advisors. Elsewhere, WTI crude shot past $65 a barrel, and Brent futures reached their highest level since December 2014.