Wall Street opens up as Chinese President Xi Jinping promises trade war can be avoided in Boao speech
Wall Street stocks jumped early Tuesday following a conciliatory speech by Chinese President Xi Jinping that reassured investors a trade war with the United States could be avoided.
About one hour into trading, the Dow Jones Industrial Average was at 24,457.69, up 2.0 per cent. The broad-based S&P 500 gained 1.7 per cent to 2,656.46, while the tech-rich Nasdaq Composite Index advanced 1.6 per cent to 7,061.91.
Xi, in a speech at the Boao Forum – Asia’s equivalent of Davos – pledged on Tuesday to lower tariffs on auto imports this year and take other steps to open the world’s number two economy “wider and wider”, addressing major complaints by the United States in an escalating trade row.
A series of tit-for-tat threats by the US and China to impose retaliatory tariffs on one another has rattled markets in recent weeks.
Xi’s remarks “set a very positive tone for lowering US-China trade tensions”, said Rajiv Biswas, Asia-Pacific Chief Economist at IHS Markit.
But Eurasia Group said the speech was “not a game-changer” and that it “underdelivers after all the hype from Beijing”.
“Xi proposed actions which were previously promised and none address the reciprocity issues in US-China relations”, said the Eurasia Group note.
Facebook rose two per cent ahead of a congressional testimony by its chief executive Mark Zuckerberg over a consumer data scandal.
In his prepared statement, Zuckerberg took responsibility for security lapses at the world’s largest social network.
Banking, energy, industrial and technology sectors were solidly higher, with Dow companies Boeing, Caterpillar, ExxonMobil, Intel and DowDuPont all winning more than three per cent.