U.S. stocks surged Friday morning as investors turned hopeful about the outcome of a second day of trade talks between the U.S. and China, with President Trump set to meet China’s Vice Premier Liu He later Friday.
How did the benchmarks perform?
The Dow Jones Industrial Average DJIA, +1.51% rose 386 points, or 1.5%, to 26,881, the S&P 500 index SPX, +1.53% advanced 43 points, or 1.5%, to reach 2,981, while Nasdaq Composite Index COMP, +1.71% gained 132 points, or 1.7%, to 8,084.
On Thursday, the Dow rose 150.66 points, or 0.6%, to 26,496.67. The S&P 500 index climbed 0.6%, or 18.73 points, to 2,938.13. The Nasdaq picked up 47.04 points, or 0.6%, to finish at 7,950.78.
For the week, the Dow is poised to rise 1.1%, while the S&P 500 and Nasdaq are on pace to post 1% and 1.2% rise, respectively.
What drove the stock market?
President Donald Trump tweeted that ‘good things are happening’ at the trade negotiations.
He is expected to meet China’s Vice Premier Liu He later Friday. The Wall Street Journal reported that terms for a possible tentative deal could include China offering more agriculture purchases, a joint pact to deter Beijing from devaluing its currency, and, on the U.S. side, suspending planned tariffs and relaxing export bans against blacklisted Chinese telecom giant Huawei Technologies Co.
China overnight Friday set a timetable for opening its finance industries. The China Securities Regulatory Commission said Friday overseas financial service companies in futures, securities and mutual funds will be able to apply for total control of onshore ventures starting in 2020. The move came as the country speeds up its financial opening-up. China scrapped those foreign ownership limits a year earlier than originally planned, state-run media agency Xinhua said.
“The whole U.S.-China trade negotiations have been a cloud over the markets in the last few weeks. If this partial breakthrough comes to fruition, ti will give at least a temporary boost to the markets, and we’re seeing that reflected in stocks this morning. There seems to eb relief that there will some type of progress on these discussions,” said Michael Arone, chief investment strategist for State Street Global Advisors.
“The biggest positive that could come as a result of the negotiations is a freeze on new U.S. tariffs set to take place in a couple of days,” he said.
On the data front, University of Michigan’s preliminary consumer sentiment report came in at 96 , above economists’ estimates for a reading of 92, according to Econoday. Meanwhile, the import price index climbed 0.2% last month, the government said Friday. The cost of goods imported into the U.S. rose in September for the first time in four months, but most of the increase stemmed from higher oil prices.
Investors also will watch for comments from Boston Federal Reserve President Eric Rosengren — one of three dissenters in the Fed’s last decision — set to speak at the American Economic Challenges Symposium in Madison, Wis., at 1:15 p.m., while Dallas Fed President Robert Kaplan, is expected to moderate a panel in San Francisco at 3 p.m. Kaplan isn’t a voting member of the rate-setting Federal Open Market Committee.
See also: Bank stocks surge as U.S.-China trade hopes lift Treasury yields
Which stocks are in focus?
Shares of Apple Inc. AAPL, +1.79% advanced 1.2% as analysts at Wedbush raised its stock price target to $265 from $245.
The stock for Voxx International Corp. VOXX, -1.89% climbed 5.2% after the technology manufacturer reported that its operating losses fell in the first half of the year.
Shares of Bed Bath & Beyond BBBY, +4.92% rose 3.5% in early action after it named Target Corp.’s TGT, +1.45% head of merchandising as its new chief executive.
How did other assets trade?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +4.64% climbed to 1.711%, compared with 1.649% on Thursday.
Gold futures held below the psychologically significant level at $1,500. December gold GCZ19, -1.22% was most recently down 0.8% at $1,488.90 an ounce.
West Texas Intermediate crude for November delivery CLX19, +0.86% jumped 81 cents, or 1.5%, to $54.35 a barrel on the New York Mercantile Exchange, after an oil tanker attack in the Middle East.
In Asia overnight Friday, Hong Kong’s Hang Seng Index HSI, +2.34% surged 2.3% to 26,308.44, the China CSI 300 000300, +0.96% rose 1% to reach 3,911.73, and Japan’s Nikkei 225 NIK, +1.15% gained 1.2% to 21,798.87. The Stoxx Europe 600 SXXP, +1.92%, meanwhile, advanced 1.6% to 388.91. And the FTSE 100 UKX, +0.53% gained 0.3% to 7,205.83, even as the pound jumped 1.8% against the dollar, amid renewed Brexit optimism.
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