Bengaluru: Shares of technology and industrial companies pushed Wall Street’s main indexes to session highs on Monday, after President Donald Trump said he would delay a planned hike in tariffs on Chinese imports.
The announcement is the clearest sign yet that the two countries are closing in on a deal to end their prolonged trade spat that has slowed global growth and disrupted markets.
Trump said he was optimistic that a final trade deal could be reached with China and that he would hold a summit to sign any pact, but cautioned an agreement may still not happen.
“The focus is obviously on trade today, with the seeming resolution to the trade war which is causing the positivity,” said Jamie Cox, managing partner for Harris Financial Group in Richmond, Virginia.
“There is going to be some sort of deal because the economy is softening and tariffs are partly to blame for it.”
The S&P technology index rose 1.12 per cent, with Apple Inc’s 1.5 per cent rise leading the rally.
Gains in chip companies, which have a big exposure to the Chinese market, helped the Philadelphia semiconductor index jump 1.75 per cent.
The industrial sector climbed 0.95 per cent, helped by a more than 1 per cent rise in shares of tariff-exposed companies Caterpillar Inc and Boeing Co.
But the sector got the biggest boost from General Electric Co, which jumped 9.4 per cent after announcing a sale of its biopharma business to Danaher Corp for $21.4 billion (Dh78.6 billion). Danaher shares were up 8 per cent.
Optimism on the trade front and dovish signals from the Federal Reserve have bolstered US stocks in recent weeks, with the S&P 500 index about 4 per cent away from its record closing high hit in late September.
The benchmark index is now trading at its highest level since November 8.
At 11.07am ET the Dow Jones Industrial Average was up 206.48 points, or 0.79 per cent, at 26,238.29, the S&P 500 was up 20.58 points, or 0.74 per cent, at 2,813.25 and the Nasdaq Composite was up 73.62 points, or 0.98 per cent, at 7,601.17.
The financial sector rose 1.35 per cent, helped by a 1.50 per cent rise in bank stocks, ahead of Fed Chair Jerome Powell speech about monetary policy on Tuesday and Wednesday.
Adding to optimism was a flurry of M&A activity.
Spark Therapeutics shares more than doubled after Swiss drugmaker Roche Holding AG agreed to buy the company for $4.3 billion.
Canadian miner Barrick Gold Corp offered to buy US rival Newmont Mining Corp for nearly $18 billion.
However, Newmont’s shares dipped 0.7 per cent as the offer price was at a discount.
Advancing issues outnumbered decliners by a 2.15-to-1 ratio on the NYSE and by a 1.99-to-1 ratio on the Nasdaq.
The S&P index recorded 58 new 52-week highs and one new low, while the Nasdaq recorded 109 new highs and four new lows.