After months of confrontation and talks on establishing new rules for US-China trade relations, the US president this weekend announced that the two countries had achieved a breakthrough on an agreement and would sign “phase one” of a trade deal “very shortly”. The news sent traders over the moon.
The main US stock indexes are maintaining their record-breaking numbers due to optimistic expectations following President Donald Trump’s announcement of a “breakthrough” in trade talks with China on a new deal, as well as Boeing Chief Executive Officer Dennis Muilenburg’s resignation.
Since the trading on the US exchange began on 23 December, the Dow Jones Industrial Average (DJIA) has risen by 0.35% to 28 555,88 points . NASDAQ, on which stocks of leading tech companies are traded, has grown to 8 949,66 points, or 0.28%, while the S&P 500’s growth reached 0.11%, as it surged to 3 224,83 points. Thus, both NASDAQ and the S&P 500 hit new all-time highs.
Donald Trump touted a relief in the months-long tariff war speaking at a Turning Point USA meeting, saying that the US and China would sign “phase one” of a trade deal “very shortly”.
In turn, the tariff committee of China’s State Council announced on 23 December that Beijing was easing the import duties on more than 850 goods starting 1 January 2020.
Chief market economist at Spartan Capital Securities Peter Cardillo told Reuters that the developments in the trade row between the two leading economies are driving market sentiment.
Apart from the promised breakthrough, news from US aerospace giant Boeing about its CEO Dennis Muilenburg stepping down amid its Boeing 737 MAX crisis led shares to jump by 2.7%, also boosting the Dow Jones index. Home statistics are also said to have played a part, as new house sales in the US rose by 1.3% in comparison with October’s data.