U.S. stocks closed higher Wednesday, trimming gains but with the S&P 500 and Nasdaq rising for a fourth straight session, after President Donald Trump said he may let a China trade-deal deadline “slide” if the two sides were making enough progress.
How did major indexes fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.88% rose 117.51 points, or 0.5%, to 25,543.27, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.12% climbed 8.30 points, or 0.3%, to 2,753.03. At its session high, the Dow was up 200 points.
The Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -1.07% gained 5.76 points to 7,420.38, after failing to hold above 7,431.50 which would mark the end of a bear market that began on Dec. 21.
What drove the market?
Trump said Tuesday that he would allow for flexibility on the timeline for a deal with China if an agreement looks close. Meanwhile, Chinese President Xi Jinping is expected to meet key members of the U.S. delegation on Friday, the South China Morning Post reported, citing sources.
A third day of bilateral trade negotiations were under way in Beijing, with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer expected Thursday for more high-level discussions. The White House had previously referred to its stop points as a “hard deadline.” A 90-day trade truce ends on March 1, and tariffs on some $200 billion in goods had been set to be raised to 10% from 25% at 12:01 a.m. Eastern time March 2.
Meanwhile, Trump said a second government shutdown was unlikely even as he expressed unhappiness with a tentative agreement that allows for 55 miles of new border fencing reached by Democratic and Republican lawmakers late Monday.
Consumer prices were unchanged in January compared with the previous month, below the 0.1% increase in prices expected by economists per a MarketWatch poll. The year-over-year growth in prices as measured by the consumer-price index fell in January to 1.6%, from a rate of nearly 3% seen in July, a trend that has helped support the argument that the Federal Reserve doesn’t need to aggressively raise interest rates this year.
Atlanta Federal Reserve President Raphael Bostic said in a moderated discussion at the European Financial Forum Tuesday morning that he is predicting the Fed will raise rates one time in 2019.
Cleveland Fed President Loretta Mester told an audience in Lexington, Kentucky Wednesday morning that she doesn’t have an economic recession in her forecast, nor does she the U.S. in the midst of a housing bubble.
Philadelphia Fed President Patrick Harker also endorsed a single rate increase in 2019, while predicting a another hike would be appropriate in 2020, during a speech Wednesday to the Jewish Business Network luncheon.