Stocks Climb as Trump Suggests a Trade Deal Is Near

Date : 12/12/2019 @ 3:29PM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 7042.47  24.59 (0.35%) @ 4:35PM
FTSE 100 share price Chart

Stocks Climb as Trump Suggests a Trade Deal Is Near

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By Caitlin Ostroff and Alexander Osipovich 

Stocks climbed Thursday after President Trump said on Twitter that the U.S. and China are nearing a trade deal.

Major indexes opened slightly lower but jumped after Mr. Trump tweeted, "Getting VERY close to a BIG DEAL with China. They want it, and so do we!"

The Dow Jones Industrial Average gained 170 points, or 0.6%, to 28081 in early trading. The S&P 500 advanced 0.6%, while the Nasdaq Composite climbed 0.5%.

The tweet came ahead of a Sunday deadline, in which a fresh round of tariffs are set to go into effect on roughly $156 billion of Chinese goods.

The Wall Street Journal reported earlier this week that negotiators on both sides are working to delay the levies. The tariffs, which threaten to deepen China's economic problems and prompt retaliatory action, could also weigh on prices of cellphones, laptops and apparel for American consumers.

Investors sold government bonds in favor of riskier assets after Mr. Trump's tweet. The yield on the 10-year U.S. Treasury note rose to 1.840%, from 1.786% on Wednesday. Bond yields move in the opposite direction from prices.

Investors are also closely watching the U.K.'s general election, as voters go to the polls to determine whether Prime Minister Boris Johnson will remain in office. The FTSE 100 was up 0.7%, outpacing other European markets, while the pound fell 0.3% against the dollar.

Politicians in both the major political parties are signaling an end to years of constrained fiscal policy as the country prepares to exit from the European Union, and the vote results will play a crucial role in determining the course of Brexit. While a parliamentary majority for the Conservative Party is seen as most likely, recent polls have shown that Mr. Johnson's lead has narrowed.

Earlier in the day, the European Central Bank under its new President Christine Lagarde left interest rates unchanged at minus 0.5%.

On Wednesday, the U.S. Federal Reserve's policy makers indicated that they believe interest rates are low enough to stimulate growth in the world's largest economy as they opted to leave monetary policy unchanged. The outlook is "a favorable one," Chairman Jerome Powell said. The Fed's recent market interventions to keep short-term rates stable are also working, he said.

Write to Caitlin Ostroff at caitlin.ostroff@wsj.com and Alexander Osipovich at alexander.osipovich@dowjones.com

 

(END) Dow Jones Newswires

December 12, 2019 10:14 ET (15:14 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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