US markets open higher amid optimism over new trade deal with Mexico
The US markets have opened amid optimism as the White House and Mexico close in on agreeing a new trade deal.
Reports that the US and Mexico are close to agreeing a new North American Free Trade Agreement (NAFTA) has seen US stocks rise to all-time highs today.
The Dow Jones Industrial Average jumped 159 points and the S&P 500 Index gained 0.5 per cent to hit a record high.
The NASDAQ Composite also rose above 8,000 for the first time.
Mexican economy minister, Ildefonso Guajardo, said there was still a “very important” issue to conclude as talks between the two countries resumed today.
But he said that an announcement was “probably on the agenda” today.
US President Donald Trump also tweeted “a big deal looking good with Mexico”.
The Mexican peso also gained against the dollar off the back of reports a deal could be agreed later today.
Shares of Caterpillar and Boeing – regarded as trade bellwethers – rose 1.2 per cent and 0.9 per cent respectively.
Shares of Ford, General Motors and Fiat Chrysler also rose.
Chief economist at Raymond James, in St Petersburg, Florida, said: “What we are seeing is optimism that there is going to be some resolution to trade difficulties and then there's the news of the US and Mexico closing in on the NAFTA deal.”
“Easing trade and NAFTA are probably the biggest things today but I think it's more fundamental than that, because we are still seeing a lot of signs of strength in the domestic economy and earnings stories have been very robust.”
Tesla shares in Germany dropped five per cent this morning as investors reacted to chief executive Elon Musk's decision to abandon plans to take the company private.
But they recovered to just 2.8 per cent down ahead of the US market opening.
The Turkish lira fell nearly five per cent against the dollar as tensions between Turkey and the US continued to damage the currency on Monday.