Stocks rally on Wednesday amid hopes for U.S.-China trade deal.
The U.S. stock market advanced sharply on Wednesday amid signs that the United States and China were inching closer to a new trade deal.
All of Wall Street’s major indices finished in positive territory. The Dow Jones Industrial Average (NYSEARCA:DIA) advanced 162.94 points, or 0.6%, to close at 26,970.71.
The large-cap S&P 500 (NYSEARCA:SPY) rallied 0.6% to finish at 2,984.85. Eight of 11 primary sectors reported gains, led by information technology, which rose 1.2%. Communication services rallied 1.1%. Consumer discretionary stocks finished 1% higher.
Meanwhile, the technology-focused Nasdaq Composite Index (NYSEARCA:QQQ) jumped 1.1% to 8,077.38.
A measure of implied volatility known as the CBOE VIX (NYSEARCA:VXX) declined sharply on Wednesday, as calm returned to Wall Street. The so-called “fear index” fell 6.6% to 15.93 on a scale of 1-100 where 20 represents the historic average. VIX bottomed at 15.69 earlier in the day.
President Trump told reporters Wednesday that a new trade deal with China could happen “sooner than you think,” signaling renewed optimism in the ongoing dialogue. Both countries are expected to resume face-to-face meetings in Washington next month.
In economic data, U.S. new home sales surged in August, the Department of Commerce reported Wednesday. New home sales climbed 7.1% to a seasonally adjusted annual rate of 713,000. Sales dropped 8.6% the month before.
The Bottom Line: The U.S. and China are set to resume trade negotiations next month. Despite recent optimism, both sides remain far off on a number of key issues, including Chinese industrial policy and intellectual property.