The Dow was already primed for a colossal rally on Thursday after US and Chinese officials set a date for the next round of trade war negotiations.
But when the editor of a Communist Party mouthpiece teased that he expects to see a “breakthrough” when the two economic superpowers resume negotiations in October, the stock market went absolutely berserk.
As of 11:30 am ET, the Dow Jones Industrial Average had climbed an astounding 442.57 points. The rally launched the DJIA to 26,798.04 for a session gain of 1.68%.
The Nasdaq assembled a similar advance, spiking 1.64% to 8,106.91.
The S&P 500 lagged its peers, rising 1.36% to 2,977.59. The large-cap index must now once again grapple with the psychologically-significant 3,000 mark.
The stock market opened to mammoth gains after US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer spoke on the phone with Chinse Vice-Premier Liu He for the first time since August 13.
Multiple reports confirmed that Mnuchin, Lighthizer, and Liu had agreed to hold top-level meetings in October.
That was sufficient to ignite a massive Dow Jones rally, even though conventional wisdom suggested that too many sticking points remained to expect a trade deal anytime soon.
A single tweet altered that forecast, and for once, it wasn’t a tweet from President Trump. Instead, it came from Hu Xijin, the editor-in-chief of the Global Times.
Hu said that, unlike many of the 12 rounds of trade talks that have taken place since the December 2018 tariff truce, this one should produce “substantial progress” toward a trade deal.
“Personally I think the US, worn out by the trade war, may no longer hope for crushing China’s will,” he said. “There’s more possibility of a breakthrough between the two sides.”
Hu’s trade war commentary is closely followed on Wall Street since the Global Times operates under the banner of the People’s Daily – the Communist Party of China’s official newspaper.
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Last modified: June 23, 2020 2:33 PM UTC