(Reuters) – Gains in technology stocks lifted the S&P 500 to a record high on Monday, powered by growing optimism around U.S.-China trade talks and a likely reprieve for Chinese telecoms company Huawei.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 17, 2019. REUTERS/Brendan McDermid/File Photo
The benchmark index .SPX hit an intraday high of 2,977.93, surpassing its previous record high of 2,964.15 touched on June 21, as the truce agreed upon at the G20 summit boosted risk appetite.
“We’re right back on track,” U.S. President Donald Trump said after the world’s two largest economies agreed to restart talks. Trump also offered concessions including no new tariffs and an easing of restrictions on Huawei Technologies Co Ltd [HWT.UL], while China agreed to make unspecified new purchases of U.S. farm products.
Tech stocks .SPLRCT, which are Wall Street’s top performers so far in 2019, jumped 1.80%, with heavyweight Apple Inc’s (AAPL.O) 2.9% gain providing the maximum support.
Chipmakers with a sizable revenue exposure to China jumped, fueling a 3.76% gain in the Philadelphia Semiconductor index .SOX. Huawei suppliers Intel Corp (INTC.O) gained 1.4%, while Micron Technology Inc (MU.O) surged 6.1%.
“Any step toward a trade resolution, and it doesn’t have to be a lot of progress – just a step, is viewed very positively by markets,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
“And investors at this point are trying to focus on the positive in hopes that there will be some trade resolution down the line.”
Stocks saw their steepest sell-off this year in May after a breakdown in the U.S.-China trade negotiations sparked concerns of a global economic slowdown.
However, expectations of a more accommodative Federal Reserve helped the S&P 500 and the Dow Jones Industrial Average index .DJI post their best June performance in generations.
Despite the latest development in trade talks, traders are still expecting the Fed’s next move will be an interest rate cut as soon as at its July 30-31 policy meeting.
At 10:01 a.m. ET, the Dow Jones Industrial Average .DJI was up 239.94 points, or 0.90%, at 26,839.90 and the S&P 500 .SPX was up 29.26 points, or 0.99%, at 2,971.02.
The Nasdaq Composite .IXIC was up 116.02 points, or 1.45%, at 8,122.26. Shares of volatile favorites – Microsoft Corp (MSFT.O), Alphabet Inc (GOOGL.O), (NFLX.O) and Amazon.com Inc (AMZN.O) also helped boost the tech-heavy index.
A rise in oil prices lifted energy stocks .SPNY by 1.21%. OPEC and its allies looked set to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week. [O/R]
Wynn Resorts Ltd (WYNN.O), Melco Resorts & Entertainment Ltd (MLCO.O) and Las Vegas Sands Corp (LVS.N) jumped between 6% and 8.2% after gambling revenue in the Chinese territory of Macau rose more than expected in June.
The demand for riskier assets halted a recent rally in safe-haven bet gold, with prices tumbling as much as 2%.
Advancing issues outnumbered decliners by a 3.25-to-1 ratio on the NYSE and by a 2.36-to-1 ratio on the Nasdaq.
The S&P index recorded 55 new 52-week highs and no new low, while the Nasdaq recorded 97 new highs and five new lows.
Reporting by Shreyashi Sanyal and Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila