The future’s market has responded well to a tweet made by U.S. President Donald Trump saying that the U.S.-China trade negotiations were ‘moving along very well’. There is hope that a comprehensive trade deal will be made between the world’s two biggest economies.
Since taking office, Trump has heavily criticized China for unfair trade practices, including accusing China of stealing U.S. patents and making U.S. manufacturing less competitive. As rhetoric between the two countries has increased over the years, it led to tit-for-tat levying of trade tariffs.
The current negotiations were initiated at the G-20 summit in Argentina earlier this month. Now, tempers seem to be cooling, and markets are responding.
Futures have responded positively to Trump’s tweet, and Chinese state media have also responded well to current talks between Xi Jinping and Trump. March contracts on the S&P 500 Index rose by 0.8 percent at 10.20am in London, and the Nasdaq 100 and Dow Jones Industrial Average Index both rose by 0.9 percent.
This is the first time all three indexes have had a weekly gain since November.
Trump’s update on trade talks caused crude oil prices to increase by 2 percent, which saw positive consequences for energy stocks after a bruising year. Energy companies, including Exxon Mobil Corp and Chevron Corp, saw a premarket rise. The industrial sector is sensitive to trade-related news, so Trump’s tweet saw a gain of 1.5 percent for Boeing Co and Caterpillar Inc.
Calming the Trade War
Trump and Xi agreed to a 90-day truce in Buenos Aires, but markets were still unsure about how talks would pan out.