A pedestrian is reflected in an electronic stock board outside a securities firm in Tokyo, Japan. (Photographer: Noriko Hayashi/Bloomberg)

Stocks Rally Amid U.S., China Conciliatory Remarks: Markets Wrap

(Bloomberg) -- Stocks surged after conciliatory comments from U.S. President Donald Trump and Chinese President Xi Jinping aimed at releasing some pressure from the trade tensions between the world’s biggest economies. Treasuries fell with the dollar.

Major U.S. equity indexes spiked higher Tuesday afternoon following Trump praise of Xi’s “kind words on tariffs and automobile barriers.” Earlier, in a keynote address before the Boao Forum for Asia, China’s leader backed free trade and dialog to resolve disputes and pledged to open the nation’s banking and auto manufacturing sectors.

Stocks Rally Amid U.S., China Conciliatory Remarks: Markets Wrap

With the newly friendly tone, investors began weighing whether fears of an outright trade war had become overblown. That, in turn, reinvigorated faith in the synchronized global-growth story ahead of earnings season, even after a Federal Reserve official cautioned that the spat won’t be resolved soon.

Stocks continued their advance despite a midday hiccup when additional revelations arose about Monday’s raid on the office of Trump’s personal lawyer, Michael D. Cohen, by the Federal Bureau of Investigation.

“Without the underlining dynamism of momentum in the markets and supported by improving fundamentals, there is going to be a tendency for the market to be knocked around by headlines,” said Kevin Caron, a senior portfolio manager at Washington Crossing Advisors. “As we go to the next week or so, this back and forth on trade probably dominates.”

Elsewhere, European stocks climbed with shares from Sydney to Hong Kong. Gold gained. WTI crude shot past $65 a barrel, and Brent futures reached their highest level since December 2014. European government bonds edged lower, while the single currency rose after somewhat hawkish remarks by a European Central Bank official. And the yen declined.

Russian assets remained in focus following a fresh round of U.S. sanctions. The ruble extended its decline, dropping to the lowest level since December 2016, and equities fluctuated.

Terminal users can read our markets live blog here.

Here’s what is coming up this week:

  • Facebook Inc. Chief Executive Officer Mark Zuckerberg testifies at two Congressional hearings Tuesday and Wednesday.
  • U.S. CPI data and FOMC minutes due Wednesday.
  • JPMorgan Chase & Co. and Citigroup Inc. report first-quarter earnings Friday.

These are the main moves in markets:

Stocks

  • The S&P 500 Index rose 1.7 percent to 2,656.86.
  • The Nasdaq 100 Index jumped 2.2 percent and the Dow Jones Industrial Average added 1.8 percent.
  • The Stoxx Europe 600 climbed 0.8 percent to the highest in a month.
  • The MSCI All-Country World Index increased 1.4 percent.
  • The MSCI Emerging Market Index gained 1.1 percent.
  • The MSCI Asia Pacific Index advanced 0.9 percent.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3 percent to the lowest in two weeks.
  • The Japanese yen decreased 0.4 percent to 107.16 per dollar.
  • The euro gained 0.3 percent to $1.2353, the highest in two weeks.
  • The British pound increased 0.3 percent to $1.4177, the strongest in more than two weeks.

Bonds

  • The yield on 10-year Treasuries rose two basis points to 2.7972 percent.
  • Germany’s 10-year yield added one basis point to 0.516 percent.
  • Britain’s 10-year yield was little changed at 1.407 percent.

Commodities

  • Gold gained 0.3 percent to $1,340.46 an ounce.
  • West Texas Intermediate crude increased 3.7 percent to $65.77 a barrel.

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