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Shares closed higher on Wall Street on Monday as investors found reason to be cautiously optimistic about the potential for progress in the costly US-China trade war.
The gains overturned some of the heavy losses in Friday's major stock indexes, as worries over the latest escalation of the trade dispute shook the market, contributing to its fourth consecutive weekly loss.
Monday's rally started early after President Donald Trump said his negotiators received encouraging calls from China on Sunday, although the Chinese Foreign Ministry denied knowing of such calls.
This, and the fact that the trade dispute has repeatedly seen both parties attempt to negotiate before ending in acrimony and increasing tariffs and trade penalties, has not diminished the willingness of investors to increase their stocks.
Large technology companies, which do a lot of business in China and rely heavily on the outcome of the trade dispute, have largely contributed to the gains. Apple climbed 1.9% and Microsoft 1.5%.
"It always seems that Trump, after doing something that scares the market or intensifies this trade war, is trying to go back to a certain extent," said Brad Bernstein, senior portfolio manager at UBS Wealth Management USA. "As an investor, you simply need to know that there is a lot of uncertainty and that there is no short term precision at the moment."
The S & P 500 gained 31.27 points, or 1.1%, at 2,878.38. The Dow Jones Industrial Average gained 269.93 points, or 1.1%, at 25,898.83. The Nasdaq, which is heavily weighted by technology stocks, rose 101.97 points, or 1.3%, to 7,853.74.
The Russell 2000 Small Business Index gained 16.52 points, or 1.1%, to 1,476.
Major indexes are in the process of losing 3% or more in August in a month that has been volatile for the market, as investors try to determine whether trade conflicts and slowing economies around the world will drag the United States in a recession.
Along the way, traders have been hit repeatedly by the turning points of the trade war between the world's largest economies.
The conflict worsened again on Friday after China announced new tariffs on $ 75 billion worth of US goods. Trump reacted angrily on Twitter, saying at one point that he had "ordered" US companies with operations in China to transfer them to other countries, including the United States.
Trump also later announced that the United States would increase current tariffs of $ 250 billion on Chinese goods, against 25 percent currently at $ 250 billion, and that new tariffs on imports of 300 billions of dollars would be 15% instead of 10%.
The new series of tariff threats caused Friday a massive sale that has erased more than 600 points of the Dow. Global markets appeared to be heading for another sell-off early on Monday as China's indices closed sharply lower, until Trump said his trade negotiators received two "very good calls" of China Sunday.
At a press conference in France after the G7 meeting, the president said that "China wants to reach an agreement and, if we can, we will do it."
Trump expressed optimism about China hours after sending conflicting messages on the tariff war. He initially appeared to express regret on Sunday over the escalating trade dispute, but the White House later said his only regret was not to have imposed even higher tariffs on China. .
The White House announced a few weeks ago that China's negotiating team was due to visit Washington in September to continue discussions.
Ben Phillips, chief investment officer at EventShares, said the market rebounded on Monday after the sell-off after a sell-off rather than a real optimism about the long-standing trade dispute.
"Every time you experience such a downturn, you expect the next day to be a bit of a recovery bounce that bounces more on the sale than anything else happening today," he said. -he declares.
Analysts believe that investors should expect more brutal turns in trade negotiations.
"There is no clear business strategy, that's what the market is about," Phillips said. "That's what Friday showed us. The market worries growing emotions in the White House and less logic. "
Communication services and health care stocks also contributed to Monday's gains. Dish Network climbed 3.9% and Bristol-Myers Squibb rose 3.3%.
Bond prices fell, pushing the 10-year Treasury yield from 1.52% last Friday to 1.54%. Higher yields drive up interest rates on mortgages and other consumer loans, which has boosted bank stocks. Bank of America gained 1.2%.
The main indices in Germany and France closed up. The British markets were closed for a holiday.
The benchmark crude oil fell 53 cents to $ 53.64 a barrel. Brent crude, the international standard, fell 64 cents to $ 58.70 a barrel. Wholesale gasoline fell 2 cents to $ 1.62 a gallon. Heating oil decreased by 3 cents to 1.79 dollars a gallon. Natural gas increased by 8 cents to $ 2.23 per 1,000 cubic feet.
Gold fell 30 cents to $ 1,526.30 an ounce, money from 22 cents to $ 17.62 and copper from 1 cent to $ 2.54 a pound.
The dollar rose to 106.19 Japanese yen from 105.31 yen on Friday. The euro has weakened to 1.1098 USD against 1.1145 USD.
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Yuri Kageyama, editor of the AP section, contributed.
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