The main Wall Street indexes rose after the US and China agreed to postpone the imposition of new duties in an attempt to resume trade talks.
The broader S&P 500 advanced by 0.77% and reached a historic peak of 2,964.33 points. The blue-chip index Dow Jones Industrial Average added 117.44 points to 26,717.43 with Nike and Apple performing best. The technology index Nasdaq Composite jumped by 1.06% to 8,091.16 points.
At its highest level during the session, the S&P 500 jumped by 1.2% and Dow and Nasdaq added 290 points and 1.8%, respectively.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 6.76% to 14.06 a new 1-month low.
The main indexes started to limit their growth in the middle of the session. Excluding the big growth of chip makers and other technology companies, it would probably be a simple stock market day with a slight upsurge in reaction to the trade truce.
Wall Street equities had the strong first half of the year with S&P 500 has grown by over 17% since the beginning of the year, achieving its best first half over 20 years. Dow advanced 7.2% in June, the biggest increase this month in 1938. S&P 500 added 7.9% to its value for the month and this was its best performance in June since 1955.
The US President Donald Trump and his Chinese counterpart, Xi Jinping, agreed not to impose new duties on American and Chinese imports after their talks at the G20 summit in Osaka, Japan, on Saturday.
Donald Trump also said the US would mitigate restrictions on US companies selling products to Chinese telecom giant Huawei. The US banned companies from selling to Huawei in May, citing concerns about national security. The US president also said China would “buy US agricultural goods”.
Analysts identified the outcome of the Trump-XI meeting as an “uncertain pause”. There is no immediate escalation, but there is no clear route to a comprehensive deal.
A statement by Larry Kudlow, director of the National Economic Council, has increased uncertainty about trade relations between the US and China. He told on Sunday that Donald Trump did not give Huawei a “general amnesty”. Larry Kudlow added there was no timetable for finalizing the deal.
Uncertainty about trade relations between the US and China will continue to negatively affect the prospects for corporate profits and the sentiment of investors. According to FactSet data, the second quarter profit of S&P 500 companies will decline on an annual basis. Third-quarter earnings projections were also downgraded to a year-on-year decline as profit expectations of international companies exposed to China deteriorated.
Meanwhile, the Institute for Supply Management’s index showed the manufacturing sector slowing to 51.7 points in June from 52.1 points in May, but the reading was better than economists expectations of 51.3 points.
In separate data, the construction spending fell by 0.8% in May, the largest decline since November and below economists expectations of 0.3% growth. Spending in April was revised higher to a 0.4% gain from the prior estimate of a flat reading.
In the bond markets, yields on 10-year and 30-year US government bonds rose to 2.033% and 2.555%, respectively.
Corporate stocks performance
Most chip makers have risen. The stocks of Skyworks Solutions rose by 6%, while Micron Technology advanced by 3.9%. Qualcomm and Broadcom rose by 1.9% and 4.3%, respectively, while the technology giant Apple gained 1.8%.
Nike Inc and JPMorgan Chase were among the best performing blue-chip during today’s trading sessing, adding 1.76% and 1.70%, respectively.
However, the problems of Boeing with 737 MAX model continue to weight on its performance and the company’s stocks declined by 2.11%.
Shares of Wynn Resorts Ltd added more than 4% this morning after a positive report out of China. The Macau gaming authority announced that gambling revenues increased by nearly 6% in June, a figure that crushed Wall Street analysts’ expectations.
Best Buy helped pace a more than 4% lift in the consumer electronics industry group. The retail chain took a major step toward building the right side of a new cup base. Shares gapped up at the open and rose more than 4%.
Meanwhile, Royal Caribbean’s stocks fell by 2.6% and brought its losses since early May to 10%. Its stocks dismal performance comes as the Trump administration has imposed a ban on cruise-ship travel to Cuba.
Other notable decliners within the index included Freeport-McMoRan, which fell as much as 5%, and Centene, which closed out the day with a 2.3% loss.
The top performers on the S&P 500 were Skyworks Solutions Inc (+6.08%), Qorvo Inc (+5.96%) and Wynn Resorts Limited (+5.86%), while on the flipside were Coty Inc (-13.54%), Harris Corporation (-6.86%) and Range Resources Corp (-3.44%).