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The major U.S. stock indexes closed higher on Thursday, helped by positive events surrounding U.S.-China trade relations. The futures markets were pointing toward a lower cash market when a comment from a Chinese official turned the global stock markets higher. Later in the session, President Trump chimed in with upbeat comments of his own, sending the U.S. equity markets to their highs of the session.
In the cash market on Thursday, the benchmark S&P 500 Index settled at 2924.58, up 36.64 or +1.27%. The blue chip Dow Jones Industrial Average finished at 26362, up 326.15 or 1.29% and the tech-based NASDAQ Composite closed at 7973.39, up 116.51 or 1.53%.
Major technology stocks with tariff exposure, such as Apple Inc., up 1.69% and Microsoft, up 1.89%, boosted the technology sector by 1.73% for its best day since August 16. Chipmakers, which draw a large part of their revenue from China, also posted solid gains, sending the Philadelphia semiconductor index up 2.25%.
Industrial names that have been highly correlated to trade talk progress also moved higher. United Technologies advanced 1.77%, while trade bellwethers Boeing and Caterpillar rose 0.8% each while Deere closed 2.5% higher.
Positive Comments from China Set the Tone Early
Stocks began to turn higher after a Chinese official said the economic powerhouse is willing to calmly resolve the trade dispute with the United States and is against any further escalation in tensions, Gao Feng, spokesman for China’s Ministry of Commerce, said Thursday.
“We firmly reject an escalation of the trade war, and are willing to negotiate and collaborate in order to solve this problem with a calm attitude,” Gao said, according to a CNBC translation of his Mandarin-language remarks. He noted that the Chinese and U.S. trade delegations have maintained “effective” communication.
“China has plenty of means for counter measures, but under current situation, the question that should be discussed right now is about removing the U.S.’ new tariffs on $550 billion Chinese goods to prevent escalation of the trade war,” Gao said.
Confirmation of September Trade Talks Send Stocks Even Higher
After the initial jump in prices shortly after the cash market opening, U.S. shares received a boost at the mid-session after President Trump confirmed that U.S.-China trade negotiations are scheduled for Thursday.
“We’re dealing with China,” Trump told Fox News’ Brian Kilmeade during an interview on his radio show. “They really want to make a deal, and the reason they want to make a deal is they’ve lost millions and millions of jobs, they’re losing thousands of companies, they’re leaving China.”