The Dow and the broader US stock market rallied sharply Thursday, buoyed by hopes that trade tensions between the United States and China could ease.
The Dow traded nearly 300 points, or 1.1%, higher, while the S&P 500 rose 1.2%. The Nasdaq Composite rallied 1.4%. Still, August is shaping up to be the second worst month of the year for stocks, according to Refinitiv.
The optimism follows comments by a Chinese government official suggesting Beijing is hoping for continued trade talks with the United States.
“Despite numerous false starts, investors are once again optimistic about US-China trade progress,” said Alec Young, managing director of global markets research at FTSE Russell, in emailed comments.
China is willing to resolve the trade dispute “with a calm attitude,” said Gao Feng, spokesperson for China’s ministry of commerce Thursday, according to multiple reports. Asian markets nonetheless closed lower, as investors in the region remain concerned.
Treasury Secretary Steven Mnuchin told Bloomberg on Wednesday that further trade talks with China will happen, but didn’t specify when.
Last week, China announced retaliatory tariffs on US imports, which was met with frustration and further threats of tariffs by President Donald Trump.
All in all, markets remain at the mercy of trade headlines.
On the economic data front, second-quarter GDP growth was revised down to 2%,versus 2.1% at the first reading last month. The revision was in line with the consensus estimate.
“As for the Fed, investors have largely priced in another 25 basis points interest rate cut, so not much is expected from the Fed. The only thing which can move the monetary policy needle in terms of economic numbers is the upcoming US non-farm payroll data now,” said Naeem Aslam, chief market analyst at TF Global Markets, in emailed comments.
The international trade deficit in July stood at $72.3 billion, lower than expected and lower than in June, as exports grew according to advance trade in goods data from the Census Bureau.
Jobless claims for the week ending July 24 came in at 215,000, roughly in line with expectations.
