U.S. stocks rallied Monday, lifted by encouraging comments from President Donald Trump and other officials on trade talks, along with a move by China over the weekend to lower borrowing costs for companies.
Reports that Germany may also be considering stimulus measures underpinned gains for European stocks.
How did the major benchmarks fare?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +2.24% rose 249.78 points, or 1%, to end at 26,135.79, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +2.28% added 34.97 points, or 1.2%, to close at 2,923.65. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +1.72% advanced 106.82 points, or 1.4%, to finish at 8,002.81.
The session marks a second straight day of sharp gains, after Friday when the Dow Jones Industrial Average rose 306.62 points, or 1.2%, the S&P 500 index added 41.08 points, or 1.4% and the Nasdaq Composite Index gained 129.38 points, or 1.7%.
Monday’s gains are the first consecutive 1% gains for the S&P 500 since Nov. 11, 2018, according to Dow Jones Market Data.
What’s drove the market?
The Commerce Department said Monday that it has given Chinese telecom giant Huawei Technologies Co. Ltd. another 90-day reprieve during which it can continue to do business with American companies, without the granting of case-by-case licences that would otherwise be needed, after the Commerce Department added it to its “entity list” in May.
In a statement, Commerce Department Secretary Wilbur Ross said : “As we continue to urge consumers to transition away from Huawei’s products, we recognize that more time is necessary to prevent any disruption.” At the same time, the Commerce Department added another 46 Huawei subsidiaries to the list that will be subject to the full sanctions after Nov. 19.
The move comes a day after President Donald Trump played down recession fears in comments to reporters, while his top economic adviser Larry Kudlow echoed those comments in appearances on Sunday talk shows.
Kudlow predicted a strong second-half performance for the U.S. economy and told Fox News on Sunday that the administration was “looking at” a 10% tax cut for middle-income earners that was hinted at by Trump ahead of 2018 midterm elections.
Meanwhile, White House trade adviser Peter Navarro said it was a “certainty” the U.S. will have a “strong economy through 2020 and beyond with a bull market,” thanks to stimulus from major economies and “the largest trade deal ever in history.” He also insisted the “Fed will be lowering rates” as part of that global stimulus push.
“Investors appeared to take to heart Trump’s claim that the U.S. is ‘doing tremendously well,’ alongside his reassurances that Washington and China are continuing to talk trade-wise,” wrote Connor Cambell, market analyst with Spreadex in a Monday note.
Apple Inc. /zigman2/quotes/202934861/composite AAPL +1.67% Chief Executive Officer Tim Cook warned Trump at dinner Friday that tariffs could hurt his company and give rivals an advantage. Trump said Cook “made a very compelling argument, so I’m thinking about it.”