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Dow Rally Plows Ahead as China Trade Optimism Grows

Last Updated September 23, 2020 12:17 PM
Sam Bourgi
Last Updated September 23, 2020 12:17 PM

Stock indices including the Dow traded higher after Wednesday’s open and were on track for their fourth consecutive daily advance, as sentiment around U.S.-China trade negotiations improved following the conclusion of mid-level talks in Beijing.

Recovery Continues

All of Wall Street’s major indexes were holding onto firm gains as of mid-morning, with the Dow Jones Industrial Average rising 45.56 points, or 0.19%, to 23,833.01. Visa Inc. (V), Boeing Co (BA) and Chevron Corp (CVX) emerged as the early leaders, each rising at least 1.6%.

dow jones industrial average
The Dow Jones Industrial Average rose for a fourth straight day on Thursday.

The broad S&P 500 Index rose 0.06% to 2,576.01. The technology-heavy Nasdaq Composite Index advanced 0.29% to 6,916.85.

Since entering bear-market territory last month, the S&P 500 and Nasdaq have recovered 10% and 11%, respectively. All indexes bottomed on Christmas Eve before staging a large recovery on Boxing Day. The relief rally has extended into the new year thanks to a combination of trade optimism and stronger than expected data.

Stocks rose more than 1%  on Tuesday ahead of President Trump’s first prime-time address to the nation. The president made one of his strongest cases yet for increased border protection between the United States and Mexico but held off on declaring a national emergency that may have given him the latitude to move forward with an extension of the southern barrier. More on this story: President Trump Makes His Case for a Border Wall as Economy Hangs in the Balance.

Trade Optimism Builds

The first round of trade negotiations between the United States and China concluded on a positive note Wednesday, setting the stage for continued dialogue after a “good few days ,” according to a U.S. official who attended the meetings.

Ted McKinney, the U.S. Undersecretary of Agriculture for Trade and Foreign Agricultural Affairs, said the meetings “went just fine” without elaborating. The negotiations went a day longer than planned, which means both sides are treating the matter seriously. According to CNBC , both sides made progress on key issues related to the purchase of U.S. farm and energy commodities and increased access to China’s domestic market.

dow jones us-china trade war
Greater U.S. access to China’s mainland market is a major focal point in the negotiations.

The negotiations were the first face-to-face meetings since President Trump and Chinese counterpart Xi Jinping agreed in early December to put their trade war on hold for 90 days. The 90-day window expires in March.

Featured image courtesy of Shutterstock. Chart via TradingView.