US stocks gain on trade optimism, global stimulus hopes
Stocks booked their third straight session of gains Monday, with the Dow Jones Industrial Average posting a triple-digit rise on optimism about prospects for Fed monetary stimulus and easing trade tensions between the U.S. and China.
Investors eyed prospects for global stimulus. Markets are watching both the European Central Bank and the Federal Reserve for signs of monetary stimulus. In addition, Germany plans fiscal stimulus.
U.S. Commerce Secretary Wilbur Ross said Monday morning on FOX Business that the U.S. government will extend a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from U.S. companies so that it can service existing customers. An additional 50 of its units were being added to a U.S. economic blacklist.
Investors are watching the Federal Reserve and the European Central Bank in hopes that the two institutions will provide monetary stimulus.
The U.S. central bank lowered interest rates by a quarter-point at its last meeting. It was the first time it lowered rates in a decade.
Over the weekend, China’s central bank announced an overhaul to its interest-rate mechanism, which is expected to result in an easier monetary policy.
The yield on the 10-year Treasury rose to 1.61 percent as a risk-on sentiment emerged among investors.
U.S. crude oil traded higher by 1.5 percent at $55.61 per barrel.
Shares of Apple moved higher after President Trump and Apple Chief Executive Tim Cook spoke about the impact of U.S. tariffs.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| HD | THE HOME DEPOT INC. | 400.00 | -6.74 | -1.66% |
| LOW | LOWE'S COMPANIES INC. | 262.98 | +3.59 | +1.38% |
| TGT | TARGET CORP. | 121.76 | -34.24 | -21.95% |
| GPS | NO DATA AVAILABLE | - | - | - |
Estee Lauder shares rose as the company forecast full-year revenue and profit above estimates.
Investors are also worried about Trump's shocking announcement on Aug. 1 that he planned to extend tariffs across virtually all Chinese imports, many of them consumer products that were exempt from early rounds of tariffs. The tariffs have been delayed, but ultimately will raise costs for U.S. companies bringing goods in from China.
The financial highlight of the week will come Friday when Federal Reserve Chair Jerome Powell addresses the attendees at a meeting in Jackson Hole.
Retailers will continue to report quarterly earnings this week with a focus on the home improvement retailers such as Home Depot and Lowe's. Target and Gap will also report during the week.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| AAPL | APPLE INC. | 229.00 | +0.72 | +0.32% |
| EL | THE ESTÉE LAUDER COMPANIES INC. | 65.33 | +0.53 | +0.82% |
France's CAC and Germany's DAX each rose 1.3 percent. Britain's FTSE 100 was up 1 percent.
Japan's benchmark Nikkei 225 rose 0.7 percent, Hong Kong's Hang Seng rose 2.1 percent and the Shanghai Composite added 2.1 percent.
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Last week U.S. markets finished strong with a Dow gain of 1.2 percent. Each index still finished with a third straight weekly decline.
Wall Street stocks and other investments had a rollercoaster week, diving into a crater on Wednesday last week when a fairly reliable warning signal of recession flipped on in the U.S. Treasury market.
The Associated Press contributed to this article.