US stock market hits record high on trade war optimism

The S&P 500 index opened at a new all-time high after positive comments from both sides of the US-China trade war.

On an upbeat day on Wall Street, the S&P 500 gained 15 points or 0.4% to hit 3,038 points, a new record level.

Meanwhile, the Dow Jones industrial average opened higher, up 112 points or 0.4%, while the tech-focused Nasdaq index gained 0.5%.

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US President Donald Trump had earlier told reporters he expected to ink a significant part of the trade deal with China earlier than expected.

“We are looking probably to be ahead of schedule to sign a very big portion of the China deal, we’ll call it phase one but it’s a very big portion,” he said.

Earlier, China’s commerce ministry had said that technical talks about the phase one trade deal text with Washington were “basically completed”.

Neil Wilson of Markets.com said that stock market “bulls” were pushing Wall Street higher. He said it’s a “remarkable achievement against faltering corporate earnings, a festering (if not quite total) trade war, and softer macro data everywhere you look”.

Urging a degree of caution, he added that: “the bar on a US-China trade deal had been set so low that the market seems content with this pretty puny agreement”.

The Guardian was also measured in its assessment of the deal. “This is only for a phase one trade deal, which might reset relations between the two sides and could lift some tariff,” it said. “A full-blown agreement, tackling stickier issues such as forced technology transfers and China’s subsidies, is some distance off.”

However, Reuters points out that sentiment over the positive signs around the trade dispute was not the only factor at play on the markets. It explains that “rising bets on a third rate cut by the Federal Reserve” have also fuelled optimism among Wall Street traders.

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