The Dow Rose 182 Points Because Trump and Xi Can Climb Down to Go Forward on Trade

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Illustration by Michael George Haddad

The Pendulum Swings. All three main U.S. stock indexes rebounded from Tuesday’s losses, helped by reports that China is ready with offers to de-escalate the trade fight with the U.S. Still, the two countries are facing many unsolved problems. Turkish stocks continue to tumble after the country launched a military operation in Syria to seize territories held by U.S.-backed Kurdish forces—after the U.S. troops withdrew. AT&T (ticker: T) is selling its Puerto Rico business in an effort to pay down its debt. American Airlines Group (AAL) delayed the return of its Boeing 737 MAX fleet until at least January next year. In today’s After the Bell, we…

  • watch hopes for a trade deal rising again;
  • look at other conflicts between the U.S. and China over human rights;
  • and check on the hiring activities in August that have slowed for three months in a row.

Are Hopes Real? Stocks rose on Wednesday as investors swelled with hope that China might be open to a partial trade deal with the U.S. at high-level trade talks slated for tomorrow. The Dow Jones Industrial Average added 181.97 points, or 0.70%, to close at 26,346.01. The S&P 500 rose 26.34 points, or 0.91%, to finish at 2919.40, and the Nasdaq Composite jumped 79.96 points, or 1.02%, to close at 7903.74.

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Reports suggest that China would like to de-escalate the simmering trade tensions with the U.S., and has offered to buy more American agricultural products in exchange for a partial trade deal. Such an agreement could come ahead of Oct. 15, when the U.S. plans to increase the duties on $250 billion worth of Chinese goods to 30% from 25%. Still, a comprehensive deal involving thornier issues such as intellectual-property theft and state-sponsored subsidies may be off the table for now.

Tension remains high between the world’s two biggest economies in other areas as well. On Tuesday, U.S. Secretary of State Mike Pompeo announced visa restrictions on Chinese officials that are suspected of being involved in human-rights abuses of Muslim minorities in the Xinjiang region. Soon after, China fought back with plans to deny visas to Americans—especially those employed by the U.S. intelligence community and human rights groups.

The U.S. Commerce Department has also added some high-tech Chinese firms to its trade blacklist, accusing them of human-rights abuses and aiding surveillance against the country’s Muslim minority. American companies will not be allowed to purchase from the Chinese firms on the list without government approval.

The Federal Reserve released the minutes from its latest September meeting, which showed that Fed officials were concerned that slowing global growth and rising trade-policy uncertainty could drag on the hiring activities and consumer spending in the U.S. economy.

The latest data prove the legitimacy of such concerns. The U.S. had 7.1 million job openings at the end of August, the Labor Department reported on Wednesday—that’s enough to provide every unemployed person in the country with a job. But hiring enthusiasm seems to be fading, as the total number of job openings declined for the third month in a row, and hit an 18-month low. The number of workers newly hired was also lower in August than a year ago.

Write to Evie Liu at evie.liu@barrons.com