Wall Street Rallies As Trade War Fears Ease

U.S. stocks rallied on Monday as fears of a global trade war waned, with investors betting that U.S. President Donald Trump would back down on his threat to impose hefty tariffs on steel and aluminum imports.

Strategists also cited rising oil prices and waning concerns after an Italian election for a relief rally in the three major U.S. equity indexes.

Also, the investors were watching the aftermath of Italy’s election, which registered a strong showing for anti-establishment parties, though with no group able to form a stable government.

Trump’s Tariffs Threats

Investors started to eye Trump’s threat as a negotiating tool after he tweeted that Canada and Mexico could avoid his proposed tariffs if they ceded ground in the North American Free Trade Agreement (NAFTA) talks.

Trump’s announcement last week of a plan to slap import tariffs of 25 percent on steel and 10 percent on aluminum caused the S&P to fall as much as 2 percent on Thursday.

The Dow Jones Industrial Average rose 336.7 points, or 1.37 percent, to 24,874.76, the S&P 500 gained 29.69 points, or 1.10 percent, to 2,720.94 and the Nasdaq Composite added 72.84 points, or 1 percent, to 7,330.71.

Other U.S. Sectors

All 11 S&P sectors rose, and the biggest drivers were information technology, which rose 0.9 percent and the financial sector, which gained 1.4 percent. Facebook, Amazon, Netflix, and JPMorgan provided the biggest boosts from single stocks.

The energy sector ended up 1.1 percent as oil prices rose on forecasts of robust oil demand growth and concerns output from OPEC producers would grow at a much slower pace in coming years.

The utility sector was the biggest percentage gainer with a 1.95 percent increase followed by the financial sector’s 1.4 percent gain.

Advancing issues outstripped declining ones on the NYSE by a 2.82-to-1 ratio; on Nasdaq, a 2.20-to-1 ratio favored advancers.

The S&P 500 posted 12 new 52-week highs and four new lows; the Nasdaq Composite recorded 113 new highs and 20 new lows.

Volume on U.S. exchanges was 6.91 billion shares, compared to the 8.3 billion average over the last 20 trading days.

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