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S&P, Dow soar to record highs as trade fears abate

By Vildana Hajric | Bloomberg News
U.S. stock benchmarks reached new highs Thursday on news from China about tariff and currency moves that could ease trade tensions. Treasury yields remained near their highest level this year. The dollar slid.
The S&P 500 Index soared to a record close — led by the technology, health-care and financial sectors — lodging its biggest gain in over a month. On Thursday, it rose 22 points, or 0.8 percent, to 2,930.
The Dow Jones Industrial Average also reached a new pinnacle, with 28 of 30 constituents flashing green. It climbed 251 points, or 1 percent, to 26,656. Most European and Asian shares also gained.
The Nasdaq composite also climbed 78 points, or 1 percent, to 8,028.
Trade conflicts that had stocks gyrating early in the week have since cooled off. China is said to be planning to cut the average tariff rate it charges on imports from the majority of its trading partners as soon as next month. On Wednesday, Premier Li Keqiang his government wouldn’t devalue the currency in order to boost its exports amid the trade war.
The yield on 10-year Treasuries held above 3 percent, near its high for the year. The greenback weakened after a report said the U.S. and Canada are unlikely to reach a deal on Nafta in Washington this week; jobless data was solid but did little to change the mood. The pound surged after August retail sales came in higher than expected.
“The dollar has generally strengthened on tariff fears, especially against EM currencies,” Pravit Chintawongvanich, an equity derivatives strategist at Wells Fargo Securities, said by phone. “What you’re seeing today is the opposite of that. EM equities and DM equities ex-U.S. are catching up. Today is a continuation of the risk-on theme we’ve seen in the last couple days.”
Equity markets have so far remained resilient in the face of rising bond yields, suggesting investors are comfortable with the outlook for corporate earnings and global growth even as borrowing costs rise along with trade tensions. Ahead of the Fed meeting next week some other central banks topped the agenda on Thursday, with Norway’s policy makers raising interest rates for the first time in seven years as the SNB kept deposit rates unchanged.
Elsewhere, emerging-market assets continued to rally off the lows seen earlier this month, with the rand among the leading developing-world currencies as the South African Reserve Bank held its key interest rate at a two-year low. Norway’s krone retreated as investors saw the central bank’s rate trajectory as dovish, while the Swiss franc strengthened.
West Texas crude dropped after U.S. President Donald Trump resumed his criticism of OPEC on Twitter.
Bloomberg News reporters Adam Haigh, Andreea Papuc and Yakob Peterseil contributed to this report.

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