Stocks rally at the open as U.S., China set trade meeting

|By:, SA News Editor

Stocks sprint out of the gate, with the S&P 500 opening at its highest level in more than four weeks, after the U.S. and China agreed to hold trade talks in early October; S&P +1%, Nasdaq +1.2%, Dow +1.3%.

"Even though expectations for a robust trade deal are low, with global growth continuing to deteriorate as trade tensions mount, investors are relieved just to see talks are back on," says FTSE Russell's Alec Young.

Major European markets are mostly higher, with France's CAC +1% and Germany's DAX +0.8%, but the U.K.'s FTSE -0.7% as the pound continues rallying off its lowest level since early 2017; in Asia, Japan's Nikkei +2.3% and China's Shanghai Composite +1%.

In the U.S., cyclical sectors are setting the early pace, with financials (+1.6%), information technology (+1.5%) and industrials (+1.5%) in the lead while the defensive-oriented utilities (-0.9%) and real estate (-0.7%) groups open in the red.

The VanEck Vectors Semiconductor ETF +3.7% at the open, with Advanced Micro Devices +2.8%, bank stocks such as J.P. Morgan Chase (+2.6%) and Citigroup (+3.5%) are sharply higher, and trade bellwethers Caterpillar (+3.3%) and Boeing (+2.1%) enjoy heady gains.

U.S. Treasury prices are lower following the trade news and U.S. labor market data, driving yields higher across the curve, with the two-year yield up 6 bps to 1.50% and the 10-year yield 7 bps higher at 1.53%; U.S. Dollar Index -0.3% to 98.13.

U.S. WTI crude oil +0.8% to $56.72/bbl as hopes for progress in U.S.-China trade talks outweigh last night's industry data showing a surprise inventory gain.

Still ahead: factory orders, ISM non-manufacturing index, EIA petroleum and natural gas inventories

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