US: Stocks advance on hopes of China trade deal

[WASHINGTON] Wall Street stocks bounced on Tuesday as investors hoped for upcoming trade deals to cool tensions from US President Donald Trump’s punishing global tariffs.

The Dow Jones Industrial Average closed 0.5 per cent higher at 42,519.64 while the broad-based S&P 500 gained 0.6 per cent to 5,970.37.

The tech-heavy Nasdaq Composite Index rallied 0.8 per cent to 19,398.96.

In particular, Nvidia shares gained 2.8 per cent, helping with the overall advance.

“The fact that we’re not down to me suggests that the market expects a trade deal to happen,” said Adam Sarhan of 50 Park Investments. “It’s a matter of when, not if at this point.”

He was referring to hopes of a potential deal between Washington and Beijing, although negotiations appeared deadlocked for now.

The world’s two biggest economies agreed last month to de-escalate staggeringly high tariffs on each other’s products, before Trump last week accused China of violating their pact.

The White House said on Monday that Trump and his Chinese counterpart Xi Jinping would likely hold a long-awaited call later this week.

Tuesday’s strong gains came despite the Organisation for Economic Co-operation and Development’s (OECD) cut to global growth forecasts, warning that Trump’s tariffs would stifle the world economy.

After 3.3-per cent growth last year, the global economy is now expected to expand by 2.9 per cent in 2025 and 2026.

The OECD also expects the US economy to expand by 1.6 per cent this year, down from an expected 2.2 per cent previously. AFP