Monday 4 November 2019 4:49 pm

US stock markets hit all-time highs on trade war optimism

The US’s three biggest stock markets hit all-time highs today as growing optimism about a US-China trade deal and loose global monetary policy caused investors to snap up risk assets.

Read more: Donald Trump reveals ‘phase one’ trade agreement with China

The benchmark S&P 500, the Dow Jones industrial average, and the tech-heavy Nasdaq had all risen 0.4 per cent by 4.45pm UK time.

The S&P 500 hit 3,085, the highest point in its 60-year history, shortly after the open. Meanwhile, the Dow Jones struck 27,512 before slipping back and the Nasdaq touched 8,449.

Investors were cheered by positive noises coming out of Beijing and Washington regarding the two sides’ long-running trade war.

On Friday, word went out that there had been progress towards a “phase one” deal. The markets received more good news yesterday when US commerce secretary Wilbur Ross said licenses to let US companies sell to Chinese tech giant Huawei would come “very shortly”.

Ross’s comments have boosted tech stocks today, with Chinese firms Baidu and two of the biggest risers on the Nasdaq. Intel, Cisco and IBM were among the Dow Jones’s best performers.

Chris Beauchamp, chief market analyst at City trader IG, said: “The week has begun with strong gains across markets, carrying on the solidly bullish atmosphere from the end of last week.”

He said that “earnings season, the US economy and US-China talks” were all lifting markets. Last week, many US firms’ results came in better than expected, as did a major jobs report.

A risk-on attitude also boosted European stock markets. Germany’s Dax index was the biggest riser, gaining 1.3 per cent, while the FTSE 100 climbed 0.9 per cent and France’s CAC 40 rose one per cent.

Looser global monetary policy has helped boost stocks. The US Federal Reserve last week cut rates for the third meeting in a row, and on Friday the European Central Bank’s (ECB) giant money-printing machine known as quantitative easing (QE) was fired up again.

Read more: WTO authorises China to impose $3.6bn of tariffs on US

Analysts at JP Morgan said: “In addition to Fed cuts, the restart of ECB’s QE is likely to be a positive catalyst”.

(Image credit: Getty)