The major averages finished higher Tuesday as positive trade updates boosted investor sentiment. The Dow jumped 353 points while the S&P 500 advanced 1.0%. The Nasdaq Composite climbed 1.4%.
The sharp uptick in stocks was attributed to President Donald Trump’s comments that he had positive talks with Chinese President Xi Jinping ahead of their proposed meeting at the upcoming G-20 summit. Bond markets were also in focus, with global sovereign debt rallying on the possibility of fresh monetary easing for the Eurozone. European Central Bank President Mario Draghi signaled an economic stimulus “in the absence of any improvement” to the outlook for growth and inflation. The comments sent the yield on the German 10-year bund slumping to a fresh record low of -0.30%.
U.S. Treasury prices followed their global counterparts higher, with the yield on the 10-year note down three basis points to 2.06% ahead of tomorrow’s highly anticipated Fed policy decision. On the data front, housing starts dipped 0.9% in May, worse than the expected 0.3% uptick. Separately, building permits rose 0.3% last month. In commodities, WTI crude surged 4.2% to $53.11/barrel following the positive trade updates.
The Industrial sector, which has been viewed as a proxy for trade sentiment, paced the gains today as the group added 1.9%. Notable outperformers included shares of Boeing and Caterpillar which added 5.4% and 2.4% respectively. Technology stocks also provided a tailwind to equity markets as NVIDIA jumped 5.4%. In corporate news, social media giant Facebook announced the launch of its own cryptocurrency, which will be called “Libra”.