The Dow and the S&P 500 could hit fresh record highs on Monday, as investors breathe a sigh of relief and global stocks rally following the trade developments over the weekend.
Futures for the Dow are up 1%, putting it on track to open above the all-time closing high of 26,828 points it recorded in October. At Friday’s close, the Dow was 0.9% below the record.
Meanwhile, futures for the S&P 500 are 1.2% higher, while those for the Nasdaq Composite are a whopping 1.8% higher. The S&P was only 0.4% off the record closing high it reached June 20 at Friday’s close, putting it on track to hit a fresh all-time high on Monday.
The Nasdaq has the furthest to go before hitting a new record. Friday’s close was nearly 2% below the all-time number it hit at the start of May.
President Donald Trump and China’s Xi Jinping agreed to shelve new import tariffs and continue trade talks. Trump also pledged to reverse his approach to Chinese tech giant Huawei, walking back a ban for American companies to do businesses with it.
Moreover, Trump also met with North Korea’s Kim Jong-Un in the demilitarized zone of the Korean peninsula, which is getting people excited for a new round of denuclearization talks.
“However, it’s important for investors to remember that existing tariffs remain in place, meaning the current drag on growth and earnings will continue,” Alec Young, Managing Director of Global Markets Research, FTSE Russell, wrote in a research note. “This comes at a time when global PMI data shows continued manufacturing weakness in China, Europe and even the US.”
Meanwhile in Vienna, the Organization of Petroleum Exporting Countries is beginning a two-day meeting, which has markets excited for a continuation of production cuts.
Production cuts are intended to put a floor into oil prices. However, United States oil production is surging, and that hampers the argument for higher oil prices.
US oil prices are up 2.8% on Monday at $60.12 a barrel.
