US stocks extend record highs on encouraging signs of China trade-deal progress
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- US stocks climbed on Tuesday after the US and China held talks on trade, signaling that the two are still working towards resolving trade disputes.
- “The parties also discussed the significant increases in purchases of U.S. products by China as well as future actions needed to implement the agreement,” the Office of the U.S. Trade Representative said in an online statement.
- The gains extend closing records set by the S&P 500 and Nasdaq composite indexes on Monday.
- The Dow Jones industrial average announced a major overhaul of its index constituents ahead of Apple’s planned stock split on August 31.
- The benchmark index will boot Exxon, Pfizer, and Raytheon, and replace them with Salesforce, Amgen, and Honeywell.
- Watch major indexes update live here.
US stocks climbed on Tuesday amid continued hope for the cooling of US-China trade relations.
The US, represented by Ambassador Rob Lighthizer and Treasury Secretary Steve Mnuchin, held a regularly scheduled phone call with China’s Vice Premier Liu He on Monday.
The parties reviewed the phase-one trade deal, and “addressed steps that China has taken to effectuate structural changes called for by the Agreement that will ensure greater protection for intellectual property rights, remove impediments to American companies in the areas of financial services and agriculture, and eliminate forced technology transfer,” according to a statement from the Office of the U.S. Trade Representative.
Here’s where US indexes stood shortly after the 9:30 a.m. ET market open on Monday:
- S&P 500: 3,434.22, up 0.1%
- Dow Jones industrial average: 28,290.57, down 0.1% (18 points)
- Nasdaq composite: 11,379.79, up 0.1%
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Additionally, the two parties discussed the “significant increases in purchases of U.S. products by China as well as future actions needed to implement the agreement,” the statement said.
The US and Chinese factions expressed their commitment to take the necessary steps to ensure the success of the phase one trade deal, according to the statement. The statement comes despite rising tensions over data security related to the Trump administration’s proposed ban of Tik Tok.
Meanwhile, the Dow Jones industrial average is conducting a major overhaul of its constituents ahead of Apple’s planned end-of-month stock split. The index will replace Exxon Mobil, Pfizer, and Raytheon with Salesforce, Amgen, and Honeywell.
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Exxon is the oldest member of the Dow Jones index, having been added in 1928, one year before the Great Depression.
According to Dow Jones S&P Indices, the changes will help “diversify the index by removing overlap between companies of similar scope and adding new types of businesses that better reflect the American economy.”
The changes will go into effect before the market open on August 31, the same day Apple implements a 4-for-1 stock split.
Gold slid on Tuesday, falling as much as 0.7%, to $1,915 per ounce.
Oil also got a boost from improving US-China trade relations. West Texas Intermediate crude gained as much as 2.2%, to $43.57 per barrel. Brent crude, oil’s international benchmark, jumped 2%, to $46.05 per barrel, at intraday highs.
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