The Nasdaq and S&P 500 both rose alongside the Dow. The tech-heavy Nasdaq gained 1.17% to trade at 7,966.29, while the S&P 500’s 0.98% jump carried the large-cap index to 2,934.74.
Crude oil – a tremendous indicator for the global growth outlook – surged 4% in risk-on trading conditions.
Trump Triumphant? US-China Trade Deficit Narrows
There is no question that the Dow has not enjoyed the recent escalation in the US trade war. A tremendous bout of volatility ensued as both the US and China increased tariffs, but there are signs that Trump’s tactics might be working.
Just look at today’s US trade balance data:
ING Chief International Economist James Knightley follows the US-China trade balance closely, and he said that he sees clear evidence of progress because the deficit is narrowing.
In the background, Knightley does see risks of additional trade wars lurking, as deficits with Europe and Mexico are rising.
“Creating a 2019 trade deficit estimate based on the Jan-July run rate, the deficit with China is on track to be the smallest since 2013. This may be enough for the President to claim that his tactics are working, but it is also likely to raise concerns within the EU and Mexico that they could once again face closer scrutiny given the annual US trade deficit with these economies is on course to widen out to new all-time highs in 2019.”
Couple this narrowing trade balance with China against the backdrop of firming Chinese PMI data, and the outlook for the Dow brightens. It’s good news for stocks that the world’s second-largest economy looks to be stabilizing from the trade war shock.
Dow Jones 30: Intel & Apple Soar Amid Tech Rally
Amongst the major Dow stocks, Intel was the clear winner. It surged an impressive 3.96% in a massive rally for chipmakers.