U.S. markets rose on Tuesday morning as investors continued to focus on the development of the U.S.-China trade talks. Additionally, an upbeat assessment of the economy from Federal Reserve Chairman Jerome Powell also fueled the market.
The Dow Jones Industrial Average rose modestly by as much as 50 points during Tuesday’s early morning trading sessions. Meanwhile, the S&P 500 gained 6 points or 0.2%, while the Nasdaq Composite added 19 points or 0.2%.
On Tuesday, top Chinese and U.S. negotiators agreed on talks toward a preliminary “phase one” deal, said China’s Commerce Ministry.
The ministry mentioned that Vice Premier Liu He spoke on the phone with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, in which it was described as focused on “solving issues regarding each other’s core concerns.”
Over the past week, U.S. markets have rallied on optimism regarding a potential trade deal between the U.S. and China. The two global powers are working towards a partial deal, which is geared towards resolving less controversial matters.
However, the tariff deadline on December 15 is nearing and is expected to take place on Chinese imports.
“With global central banks pumping liquidity into the system and investors have a sense that a trade deal is coming that could create more upside,” Yousef Abbasi director of U.S. institutional equities at INTL FCStone told MarketWatch. “The market is telling us that the status quo is fine — we can live with no deal in 2019 as long as we don’t see any new tariffs and the rhetoric stays on the friendly side.”
On Monday evening, Powell boosted the markets after noting that the central bank’s three rate cuts this year has helped increase home purchases, contributing to the economy. Additionally, Powell also highlighted that even though unemployment is nearing a 50-year low of 3.6%, there is still plenty of room for wages to increase and more Americans to find employment.
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