US Stocks On the Rise Nearing Trade Agreement with China

The Dow Jones Industrial index suffer some losses early in the week but saw a nice bump of 0.43 percent to close the week.  This equates to an increase of 110.32 points, bringing the index to 26,026.32. However, even with this slight recovery, the end-of-week rally was still not quite enough to maintain the 9-week winning streak. 

Still, holding at a level higher than 26,000 is nothing to scoff at.  Investors are certainly excited about it, particularly since the Dow is not the only US market index to close above an important threshold.  For example, the Standard & Poor’s index inched upward, with a 0.69 percent surge, to close just north of 2,800 on Friday, too. This threshold has long been regarded as a strong technical and psychological resistance—and it has held there for almost all of the past four months.  

In addition, the Nasdaq composite also posted a significant 62.82 rise, outpacing its peers with a 0.83 percent gain.  In fact, the Nasdaq was the only index to extend its weekly wins, which is now in its tenth consecutive week.

Analysts are saying that stocks may be healthy because the US and China are finally on the verge of finalizing their trade deal.  If all goes as anticipated, most—if not all—of the US tariffs could be lifted when Beijing follows through on their pledge to the US.  These pledges include things like improving intellectual property rights as well as investing in a vast number of American products. 

Indeed, Chinese officials have made it quite clear that a series of negotiations with US officials, over the past few weeks, will remove levies on $200 billion of Chinese goods.  Executing this move will quickly finalize the deal, though there are still a few obstacles.  

One such obstacle to remain is the time frame by which these tariffs will be lifted.  It is uncertain, for example, if they will come immediately or over a period of time. And this time frame will affect if and how the US can monitor whether or not China is holding up their obligations. As such, the US wants to hold onto tariff threats as a negotiation strategy.  And the outcome of this strategy—and these negotiations—will likely continue to influence the US stock market in the coming months. 

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