Dubai: Positive news from the US China trade deal will likely offset any weakness from the first quarter results from banks or financial services companies this week, analysts said.

The Dow Jones Industrial Average closed 0.15 per cent higher at 26,424.99, after gaining a total of 1.91 per cent in the previous week. The S&P 500 index closed 0.46 per cent higher at 2,892.74. The index gained 2.06 per cent in the past week, and the gauge is just 1.6 per cent lower than its peak of 2,940.91.

“We believe that once the US-China trade deal is eventually announced, that could release pent-up demand and trigger a knee-jerk jump in risk-on assets. However, whether such gains are sustained depends on how markets interpret the technicalities of the deal, and what it means for a slowing global economy,” Lukman Otunuga, Research Analyst at FXTM, said.

China and the US made progress toward a much-anticipated trade deal in their latest meetings, resulting in appetite for risky assets such as equities.

“If a trade deal goes through the market will make an immediate pivot the global growth debate. So, the markets could be quick to pull reigns a bit as we could find ourselves in a position as hopes for economic rebound goes charging ahead of the stark reality that one a massive piece of the puzzle, the EU, is in a very painful economic slump,” Stephen Innes, Head of Trading and Market Strategy at SPI Asset Management, said.

According to the estimates, the first quarter earnings from the US companies may see a 2.2 per cent decline, and may see a growth in subsequent quarters. Weaker than expected results are likely to keep the upside limited.

Gold may remain well bid. Comex gold for June delivery were at $1,295.90 (Dh4,758.9) an ounce, up 0.12 per cent. Comex gold futures shed 0.73 per cent in the past month.

“With the US-China trade hitting a small speed bump and Brexit drama affecting the market, gold remains bid as investors see it as a safe haven. The yellow metal is supported by major risk events that remain unsolved and with little details for investors to trade on with is a positive for the metal at the moment,” Alfonso Esparza, Senior Market Analyst at Oanda, said.