S&P 500, Dow rise amid optimism over trade and retail sales

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The S&P 500 was hanging on to a modest gain Friday, as bolstered trade hopes and upbeat consumer data stoked optimism on Wall Street ahead of an expected rate cut by the Federal Reserve.

The index continued to nudge closer to its record high, rising 0.1 per cent in morning trade with shares in the materials and financials sectors driving gains. The Dow Jones Industrial Average climbed 0.2 per cent. A decline in tech stocks weighed on the Nasdaq Composite, which fell 0.1 per cent.

Wall Street has steadily approached record levels this week — the S&P is a mere 0.4 per cent away from its all-time closing high — amid an apparent thaw in US-China trade relations leading into planned talks next month. Markets were cheered by news that China had exempted some US soyabeans and pork from additional tariffs, the latest goodwill gesture in the prolonged dispute between the world’s two biggest economies.

Earlier in the week, President Donald Trump agreed to delay the implementation of tariffs to October 15 from October 1 and said he would consider an “interim” trade deal.

In economic news, fresh reports on retail sales and consumer sentiment outpaced expectations, underlining strength in what has been a bright spot for the US economy.

Retail sales were up 0.4 per cent in August, a slower pace of growth month-to-month but better than economists’ forecast of a 0.2 per cent increase. The University of Michigan said its index measuring consumer sentiment rebounded from its August slide to hit 92 this month, as Americans weighed lower interest rates against concerns over the impact of tariffs.

The benchmark S&P was on track for its fourth consecutive daily rise and its third straight weekly gain. Meanwhile the Dow was set to book its eighth rally in as many days, its longest winning streak since May 2018.

The dollar index, which measures the greenback against a basket of global currencies, was down 0.2 per cent.

Investors sold off US government debt, sending yields higher. The yield on the 10-year Treasury note, up 7.8 basis points at 1.8694 per cent, was eyeing its highest level in six weeks.

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