Stocks jumped to new records on Monday after U.S. and China officials cooled tensions over the weekend, laying the groundwork for President Donald Trump and China President Xi Jinping to clinch a trade deal this week.
The Dow Jones surged 337.47 to conclude Monday at 47,544.59
The S&P 500 index jumped 83.48 points, or 1.2%, to 6,875.17, its first close ever above the 6,800 level.
The NASDAQ popped 432.59 points, or 1.9%, to 23,637.46, bolstered by a rise in Nvidia and other chip stocks
Chipmakers, the sector with the most to lose from tensions with China, supported the rally Monday. Nvidia as well as others such as Broadcom rose more than 2%. Tesla jumped 4%.
Qualcomm reached a new all-time high after the company announced new artificial intelligence chips, putting it in competition with Nvidia and AMD. The stock jumped 11%.
The framework potentially includes a delay of China’s rare earths restrictions that caused the latest trade flare-up, a spiking of Trump’s threatened 100% tariffs on China that were to start Nov. 1 and a resumption of Chinese purchases of soybeans.
The agreement may include a resolution of the TikTok dispute with the U.S. getting a deal for the U.S. version of the social video app.
While investors were encouraged by improving China-U.S. relations, a setback with Canada kept their enthusiasm in check. Trump on Saturday put an additional 10% tariff on Canada imports for not pulling a TV ad featuring former President Ronald Reagan knocking tariffs fast enough.
Big Tech companies’ upcoming earnings reports are on tap, with several “Magnificent Seven” stocks, including Alphabet, Amazon, Apple, Meta Platforms and Microsoft, set to release their third-quarter results this week.
Investors also expect the Federal Reserve to reduce its benchmark interest rate on Wednesday, particularly after the Bureau of Labor Statistics released slightly cooler-than-expected inflation data last week.
Prices for the 10-year Treasury recovered lost ground, lowering yields to 3.99% from Friday’s 4%. Treasury prices and yields move in opposite directions.
Oil prices ditched 13 cents to $61.37 U.S. a barrel.
Gold prices deleted $136.20 to $4,001.60. U.S. an ounce.
