US stock markets rise as Beijing and Washington agree to scrap some tariffs
US stock markets have opened higher after China said it had agreed with the US to cancel tariffs in phases, signalling a thawing of the frosty trade relations between the world’s two biggest economies.
Read more: European markets rise on US-China trade war hopes
The tech-heavy Nasdaq rose by 0.7 per cent shortly after opening, while cheerier investors lifted the Dow Jones industrial average 0.8 per cent and pushed up the S&P 500 0.6 per cent.
Washington and Beijing look set to sign a ceasefire agreement in the next few weeks that it is thought will involve China buying more agricultural product from the US and further opening its financial markets.
This morning, Chinese commerce ministry spokesman Gao Feng said a deal would involve the cancellation of tariffs.
“Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations,” he said.
The yield on the US 10-year Treasury bond – which moves inversely to its price – rose by 9.3 basis points (0.093 percentage points) to 1.903 per cent as investor confidence sent them towards riskier assets.
Among the biggest risers on the Nasdaq were Chinese tech firm Baidu, US chipmaker Qualcomm, and Chinese e-commerce firm JD.com – all companies with a strong interest in a resolution to the trade war.
Craig Erlam, senior market analyst at currency firm Oanda, said the prospect of an agreement had “given a massive lift to investors and propelled US stock markets back into record territory”.
Yet he said that the limited agreement was in a way “an acknowledgement that a more comprehensive agreement is extremely challenging and possibly impossible”.
Read more: US and China set to announce new location for trade deal signing
European stocks were also buoyed by the positive noises from Beijing. Germany’s benchmark Dax index had risen 0.7 per cent by 3.10pm UK time, while France’s CAC 40 was 0.3 per cent higher and the FTSE 100 was up 0.3 per cent.
(Image credit: Getty)