You are here

US: Stocks gain on hopes of G-20 trade breakthrough

STOCK.jpg

[NEW YORK] Wall Street stocks rallied on Tuesday on upbeat comments on trade by the US and China ahead and as the ECB signaled it could cut interest rates.

US President Donald Trump said he had a "good" conversation with China's Xi Jinping and would hold an "extended meeting" at the Group of 20 summit in Japan later this month.

Mr Xi said the two sides "will both gain by cooperating, and lose by fighting," according to a readout by Chinese state broadcaster CCTV.

The remarks raised hopes the two sides may finally strike a trade deal after multiple tariff actions on both sides.

sentifi.com

Market voices on:

The Dow Jones Industrial Average finished at 26,465.81, a gain of 1.4 per cent.

The broad-based S&P 500 rose 1.0 per cent to end the day at 2,917.75, while the tech-rich Nasdaq Composite Index advanced 1.4 per cent to 7,953.88.

Mr Trump's comments on the G-20 came after European Central Bank chief Mario Draghi said further interest rates cuts "remain part of our tools" in response to weakening growth.

Mr Draghi's comments - which lifted stocks early in the day - came as the US Federal Reserve kicked off a two-day policy meeting.

Although the Fed is not expected to cut interest rates on Wednesday, investors have been heartened by more dovish comments lately from central bankers and will be analyzing Fed Chair Jerome Powell's statements for clues on future steps, which they hope will signal a clear willingness to boost the economy.

Mr Trump has repeatedly criticized the Fed and pressured Powell to cut rates, and on Tuesday lashed out at Mr Draghi's statements, saying an ECB cut would "unfairly" harm US goods competing with a cheaper euro.

Among individual companies, embattled aerospace giant Boeing shot up 5.4 per cent after it announced the sale of 200 of the 737 Max planes to International Airlines Group.

The announcement at the Paris Air Show comes as Boeing's global fleet of 737 Max planes remains grounded following two crashes that killed 346 people. Boeing has said it is making progress with regulators on having an upgraded plane recertified.

Chip companies were among the biggest beneficiaries of increased hopes over US-China trade talks. Broadcom jumped 4.5 per cent, Micron Technology 5.7 per cent and Nvidia 5.4 per cent.

AFP