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| Stocks Rise After U.S. and China Agree to Halt Escalation of Trade War | Stocks Rise After U.S. and China Agree to Halt Escalation of Trade War |
| (35 minutes later) | |
| Stocks rose on Wall Street Monday after President Trump and President Xi Jinping agreed to a temporary truce in the trade war between the United States and China. | Stocks rose on Wall Street Monday after President Trump and President Xi Jinping agreed to a temporary truce in the trade war between the United States and China. |
| The S&P 500-stock index climbed 1.1 percent, notching its fifth gain in the last six trading sessions. Major Asian and European equity markets also posted solid increases. | The S&P 500-stock index climbed 1.1 percent, notching its fifth gain in the last six trading sessions. Major Asian and European equity markets also posted solid increases. |
| Exporting giants like Boeing, Caterpillar and Deere pulled the export-reliant S&P 500 industrial sector higher. Semiconductor makers, which have been hurt by the trade war’s potential to disrupt their widespread production networks in Asia, also rose, as did tech giants such as Apple, which climbed more than 3 percent. | Exporting giants like Boeing, Caterpillar and Deere pulled the export-reliant S&P 500 industrial sector higher. Semiconductor makers, which have been hurt by the trade war’s potential to disrupt their widespread production networks in Asia, also rose, as did tech giants such as Apple, which climbed more than 3 percent. |
| Still, market gains were tempered by doubts that the fragile cease-fire — essentially a 90-day postponement of additional American tariffs on Chinese imports — would put the dispute between the world’s two largest economies to rest permanently. | Still, market gains were tempered by doubts that the fragile cease-fire — essentially a 90-day postponement of additional American tariffs on Chinese imports — would put the dispute between the world’s two largest economies to rest permanently. |
| “Just because they have a truce for three months doesn’t mean this thing is going away,” said Jurrien Timmer, director of global macro at the asset manager Fidelity Investments in Boston. | “Just because they have a truce for three months doesn’t mean this thing is going away,” said Jurrien Timmer, director of global macro at the asset manager Fidelity Investments in Boston. |
| Other markets responded in kind to the trade truce, which was reached Saturday in Buenos Aires. Soybeans rose on commodities markets on the prospect that China could begin to buy American crops again. China’s currency, the renminbi, strengthened against the United States dollar. | Other markets responded in kind to the trade truce, which was reached Saturday in Buenos Aires. Soybeans rose on commodities markets on the prospect that China could begin to buy American crops again. China’s currency, the renminbi, strengthened against the United States dollar. |
| The détente, forged by Mr. Trump and Mr. Xi over a dinner, merely postpones a larger reckoning over trade. Under the deal, the United States will postpone an increase in tariffs that was set to be imposed Jan. 1, and it sets a March 1 deadline for the countries to reach a more extensive pact. | The détente, forged by Mr. Trump and Mr. Xi over a dinner, merely postpones a larger reckoning over trade. Under the deal, the United States will postpone an increase in tariffs that was set to be imposed Jan. 1, and it sets a March 1 deadline for the countries to reach a more extensive pact. |
| The deal leaves in place American tariffs on $250 billion in Chinese goods and the retaliatory measures enacted by Beijing. It is unclear whether the countries can resolve such thorny questions as the Chinese government’s support for sensitive industries and protections for American-created intellectual property. | The deal leaves in place American tariffs on $250 billion in Chinese goods and the retaliatory measures enacted by Beijing. It is unclear whether the countries can resolve such thorny questions as the Chinese government’s support for sensitive industries and protections for American-created intellectual property. |
| Still, the relatively good outcome of the meeting between Mr. Xi and Mr. Trump adds to the sense of relief for investors. A range of worries — about the Federal Reserve’s plans to continue raising interest rates, the impact of the midterm elections in the United States, the trade war and signs of slowing global growth — weighed on stocks in October and November. After it peaked on Sept. 20, the stock market’s gains for the year melted away as the S&P 500 slumped more than 10 percent through Nov. 23. | Still, the relatively good outcome of the meeting between Mr. Xi and Mr. Trump adds to the sense of relief for investors. A range of worries — about the Federal Reserve’s plans to continue raising interest rates, the impact of the midterm elections in the United States, the trade war and signs of slowing global growth — weighed on stocks in October and November. After it peaked on Sept. 20, the stock market’s gains for the year melted away as the S&P 500 slumped more than 10 percent through Nov. 23. |
| In recent weeks, several developments had also helped allay those concerns. Last week, the Fed chairman, Jerome H. Powell, sparked a market rally when he said interest rates were “just below” a range of estimates for the neutral level, meaning the Fed was nearing the point where it would not be tapping on the brakes or pressing on the gas on the economy. His statements raised investor hopes that the Fed might not lift interest rates as high as previously thought. | |
| Meanwhile, the third-quarter earnings season has shown corporate profits remained strong. | |
| The midterm elections on Nov. 6 went largely as expected, with Democrats taking control of the House of Representatives and Republicans retaining control of the Senate. | The midterm elections on Nov. 6 went largely as expected, with Democrats taking control of the House of Representatives and Republicans retaining control of the Senate. |
| “What were the worry points? Earnings and sales, the election, China, interest rates,” said Richard Nackenson, a portfolio manager at the asset management firm Neuberger Berman. “Wow, guess what? It’s all been mitigated.” | “What were the worry points? Earnings and sales, the election, China, interest rates,” said Richard Nackenson, a portfolio manager at the asset management firm Neuberger Berman. “Wow, guess what? It’s all been mitigated.” |
| Mr. Nackenson stressed, however, that the market’s worries had not been resolved. Investors remain aware that the conflict between China and the United States is far from resolved, and stock market enthusiasm may be fleeting. | Mr. Nackenson stressed, however, that the market’s worries had not been resolved. Investors remain aware that the conflict between China and the United States is far from resolved, and stock market enthusiasm may be fleeting. |
| “We see it obviously as a positive that there is a pause in the trade war talk,” said Richard Weiss, chief investment officer for multi-asset strategies at American Century Investments. “But it could reignite at any moment.” | “We see it obviously as a positive that there is a pause in the trade war talk,” said Richard Weiss, chief investment officer for multi-asset strategies at American Century Investments. “But it could reignite at any moment.” |