Dow Rampages to Triple-Digit Gains with Trump’s ‘New World Order’
TOPSHOT - n walks to US President Donald Trump greets North Korea's leader Kim Jong Un at the DMZ (de-militarized zone) over the weekend. | Source: Photo by Brendan Smialowski / AFP
Dow Jones futures rocketed 250 points higher on Monday after Donald Trump’s whirlwind weekend of diplomacy. In a matter of days, he eased trade tensions with China, struck a friendly tone with Russia, and became the first sitting US president to step into North Korea.
The string of diplomatic meetings led one commentator to christen Trump’s “new world order .” Whether it’s political theater ahead of Trump’s re-election campaign or meaningful progress, traders reacted positively, sending the Dow into a triple-digit surge and the stock market into a broad recovery.
Dow futures surge 270 points
Dow Jones Industrial Average (DJIA) futures ripped higher on Monday pointing to the strongest stock market open in weeks. At 6.13 am EST, Dow futures jumped 277 points higher (1 percent) to 26,866.
S&P 500 futures charted a similar pattern, up 33 points (1.1 percent) in pre-market trading. The tech-heavy Nasdaq Composite futures struck the biggest percentage gain, up 1.74 percent or 133 points.
Trump makes history in North Korea
Donald Trump became the first sitting US president to step across the North Korean border on Sunday. He shook hands with Kim Jong Un in Panmunjom, a border village inside the demilitarized zone (DMZ).
The world leaders reportedly spoke for an hour and agreed to continue bilateral discussions. Previous talks fell apart after North Korea continued nuclear development. Speaking at the border, Trump said:
“Big moment. Tremendous progress.”
Critics argue the meeting was little more than a photo opportunity. But Trump’s shift from aggression to diplomat-in-chief has given the Dow some much-needed relief.
Dow propelled by trade war truce with China
While Trump’s meeting with Kim Jong Un was mostly symbolic, the sit-down with Xi Jinping was the real catalyst behind Monday’s Dow Jones surge.
The hyped G20 meeting on Saturday ended with both nations agreeing to hold off on future tariffs . Xi and Trump also made a commitment to restart discussions and engage in respectful negotiations.
“We are right back on track” – Trump at the G20.
Trump also rolled back the ban on US companies selling products and services to Huawei. Trump initially blacklisted Huawei over fears of China gaining access to state secrets. It was an aggressive move that helped derail the trade negotiations in May.
Trump’s diplomatic tone eases Dow Jones jitters
Extending his new world order, Trump spoke at length with Russian president Vladimir Putin on Friday. The pair agreed to maintain bilateral discussions and collaborate on macro and economic issues.
Trump’s whirlwind diplomacy tour through Asia has certainly buoyed global markets. US indexes look set to open with a bang on Monday as traders gain confidence in the geopolitical arena. Multiple Wall Street banks were nervous that continued trade tensions would drag the US economy into recession. Those nerves have begun to ease.
Of course, Trump’s softer tone is due in part to his upcoming re-election. With a powerful presence on the global stage and a strong stock market, it’ll be near-impossible to beat him in the 2020 election. For now, at least, traders are enjoying the new tone.
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