Breaking News
0

Stocks - Wall Street Surges on Hopes for China Trade Deal and Lower Rates

Stock MarketsJun 18, 2019 05:02PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com - Stocks took off on Tuesday after President Donald Trump announced he plans to meet with Chinese President Xi Jinping in a bid to resolve their trade dispute.

In addition, pressure to move U.S. interest rates lower increased after the head of the European Central Bank said he was prepared to cut interest rates to support the euro zone economy.

The rally brought the S&P 500 to within 1.3% of a new high in a rally pushed by big tech stocks and Boeing (NYSE:BA).

The S&P 500 rose 1%. The Dow added 1.4%, and the Nasdaq Composite jumped 1.4%. The Dow is within 1.8% of an all-time high. The Nasdaq is 2.7% below its high reached in April. The Nasdaq 100 index, which was up 1.5% on Tuesday, is still 2.8% below its 52-week high.

The rally was started by ECB President Mario Draghi's declaration the bank was prepared to restart its economic stimulus program if the outlook for inflation does not improve.

It took off later when Trump said he planned an extensive meeting with Xi at the G-20 meeting this month in Tokyo. The U.S. and China have been locked in a bitter trade dispute for more than a year that has included tariff increases and roiled economies worldwide and pushed oil prices lower.

The two announcements helped U.S. interest rates move lower, even as Trump accused Draghi of currency manipulation. The 10-year Treasury yield fell to 2.06% on Tuesday, down more than a fifth this year alone and the lowest level since Nov. 8, 2016.

The Federal Reserve is meeting Tuesday and will announce a rate decision Wednesday afternoon. Investing.com's Fed Rate Monitor Tool Fed Rate Monitor Tool suggests a 73% chance the central bank will leave its key Federal Funds rate at 2.25% to 2.5% and more than an 80% chance rates will be cut in July.

Boeing was the fifth-best S&P 500 performer as well as the top Dow stock. Boeing jumped 5.4% and contributed nearly 37% of the Dow's 353-point gain following an order for its troubled 737 Max jet at the Paris Air Show.

Apple (NASDAQ:AAPL), up 2.4%, and Microsoft (NASDAQ:MSFT), up 1.7%, contributed 29.8% of the Nasdaq 100's gain of 109 points on the day.

The ally was the biggest for the S&P 500 and the Dow since June 4 and the biggest for the Nasdaq since June 7. The S&P 500 is up 16.4% this year. The Dow is up 13.5% and the Nasdaq is up 19.9%.

The trade and interest-rate news offset mixed news on housing starts for May. Starts were higher than expected, but off slightly in the month. Estimates for March and April were revised higher. Building permits were higher. The U.S. housing is expected to be strong this year, thanks to lower mortgage rates, but most demand is coming from first-time buyers struggling with affordability issues.

Oil prices moved higher on the trade-and-interest-rate news and a report from The Wall Street Journal that Saudi Arabia is pressuring OPEC and OPEC-plus members to continue to cap production for the rest of the year. That helped energy stocks move higher.

Chevron NYSE:CVX) and Exxon Mobil (NYSE:XOM) were up 1.3% and 0.9%, respectively. The Philadelphia oil service index climbed 2.8%. WTI futures were up 3.8% to $53.90 a barrel. Brent futures, the global benchmark, rose 2% to $62.14 a barrel.

Oil prices have fallen substantially from their April highs because U.S. oil production is rising and there are signs many OPEC members aren't abiding with the deal to cut oil production.

Winners and losers in the S&P 500

Xilinx (NASDAQ:XLNX), Micron Technology (NASDAQ:MU) and Qorvo (NASDAQ:QRVO) were among the top S&P 500 performers on the day.

SL Green Realty (NYSE:SLG), Constellation Brands (NYSE:STZ) and Western Union (NYSE:WU) were among the worst performers.

Stocks - Wall Street Surges on Hopes for China Trade Deal and Lower Rates
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments
Michael Angelo
Michael Angelo Jun 18, 2019 5:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Summary: mani pulation is now directly from the wh ite ho use instead of the usual news and press trying to link moves in the market. Incredible that everyone is happy when going to a recession when applying same old instruments proven useless before. Also tomorrow Powell will said the economy is ok but we need to help because we are loosing speed in the Ballon. Basically make money worry later.
alex smith
alex smith Jun 18, 2019 5:16PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
look at the pattern trump is following as he books profits on Dow from the chaos he created
Kenneth Gold
Kenneth Gold Jun 18, 2019 4:40PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Trump looks rejectedly afar from the punch bowl as China and Russia tango.
Mojo Snake
Mojo Snake Jun 18, 2019 4:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Call the paramedics, I think we have a Hopium Overdose. I see no need to lower rates. I think they should stay with the original plan to raise by the end of the year.
Steve Swisher
Swish Jun 18, 2019 4:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Lots of manipulation.
druid returns
druid returns Jun 18, 2019 4:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
uhh.. That's what the federal reserve is for.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email