(Reuters) – Wall Street’s main indexes rallied on Monday, with the S&P 500 hitting an all-time high, as technology stocks gained on growing optimism around U.S.-China trade talks and a likely reprieve for Chinese telecoms company Huawei.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., June 17, 2019. REUTERS/Brendan McDermid/File Photo The benchmark index .SPX hit an intraday high of 2,977.93 earlier in the session, as the truce agreed upon at the G20 summit boosted risk appetite.
“We’re right back on track,” U.S. President Donald Trump said after the world’s two largest economies agreed to restart trade talks. Trump also offered concessions including no new tariffs and an easing of restrictions on Huawei Technologies Co Ltd [HWT.UL], while China agreed to make unspecified new purchases of U.S. farm products.
Tech stocks .SPLRCT, which are Wall Street’s top performers so far in 2019, jumped 1.57%, with heavyweight Apple Inc’s ( AAPL.O ) 2.5% gain providing the maximum support.
Chipmakers with a sizable revenue exposure to China jumped, fueling a 3% gain in the Philadelphia Semiconductor index .SOX. Huawei suppliers Intel Corp ( INTC.O ) rose 0.7%, while Micron Technology Inc ( MU.O ) surged 5.2%.
“The outcome between Xi and Trump was probably the best that could be expected,” said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC said.
“Now with a trade truce and quite likely an eventual trade agreement coming online, the technology space, which is heavily connected to Asia, would be an area of the market you want to take a bet on.”
Stocks saw their steepest sell-off this year in May after a breakdown in the U.S.-China trade talks sparked concerns of a global economic slowdown.
But hopes that the Federal Reserve would cut interest rates to preserve a strong run of U.S. economic growth helped the S&P 500 and the Dow Jones index post their best June performance in generations.
Despite the latest development in talks, traders still expect the Fed’s next move will be a rate cut at its July 30-31 policy meeting.
At 11:06 a.m. ET, the Dow Jones Industrial Average .DJI was up 167.07 points, or 0.63%, at 26,767.03 and the S&P 500 .SPX was up 23.70 points, or 0.81%, at 2,965.46.
The Nasdaq Composite .IXIC was up 93.94 points, or 1.17%, at 8,100.18. Shares of Microsoft Corp ( MSFT.O ), Alphabet Inc ( GOOGL.O ), ( NFLX.O ) and Amazon.com Inc ( AMZN.O ) also boosted the tech-heavy index.
Gains on the Dow index were limited by a 0.7% drop in Boeing Co ( BA.N ) after a report that federal prosecutors had subpoenaed records relating to the production of the 787 Dreamliner in South Carolina.
A rise in oil prices lifted energy stocks .SPNY by about 1%. OPEC and its allies looked set to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week. [O/R]
Wynn Resorts Ltd ( WYNN.O ) jumped 7.2%, the most on the S&P, as gambling revenue in the Chinese territory of Macau rose more than expected in June. Shares of peers Melco Resorts & Entertainment Ltd ( MLCO.O ) and Las Vegas Sands Corp ( LVS.N ) also rose.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 1, 2019. REUTERS/Brendan McDermid Coty Inc ( COTY.N ) tumbled 17.1%, falling the most on the S&P, after the company said it would overhaul its operations and write down about $3 billion in value of its brands acquired from Procter & Gamble Co ( PG.N ).
Advancing issues outnumbered decliners by a 2.19-to-1 ratio on the NYSE and by a 1.88-to-1 ratio on the Nasdaq.
The S&P index recorded 57 new 52-week highs and one new low, while the Nasdaq recorded 108 new highs and 14 new lows.
Reporting by Shreyashi Sanyal and Uday Sampath in Bengaluru; Editing by Sriraj Kalluvila