HONG KONG — Shares in technology companies led Wall Street stocks higher on Monday, with global investors buoyed by a thaw in the trade dispute between the United States and China even as prospects for a long-term deal remained uncertain.
The S&P 500 rose more than 1 percent in early trading before losing some of the gains. The information technology sector, which includes tech giants like Microsoft and Apple, was the best performing part of the United States market, rising more than 1.5 percent. A closely watched index of computer chip companies climbed more than 2.5 percent.
The tech sector has often been at the center of the economic tug-of-war between Washington and Beijing in recent months. The industry relies on an extensive network of factories in Asia, making it vulnerable to tariffs on Chinese imports.
China is also a major consumer of tech products made by companies like Apple. And the Trump administration’s ban on American firms’ selling technology to the Chinese telecommunications giant Huawei raised the risk that Beijing would retaliate against American tech firms.
On Monday, investors appeared to be shaking off concerns about such risks after President Trump and his Chinese counterpart, Xi Jinping, agreed on Saturday to resume negotiations geared toward resolving a trade war that has spooked markets around the world.
Mr. Trump also agreed to loosen restrictions on the sale of some American technology to Huawei, as long as it did not have national security implications.
The question for investors now is whether the peace will last and a deal that both sides are happy with can be reached, or if talks will break down once again.
The answer is far from clear. The two sides had seemed close to an agreement until May, when talks broke down, throwing a shadow over global markets. In comments on Sunday, the Trump administration suggested wide gaps remained between the two sides.
“Although the agreement will likely partially relieve recent negative sentiment in the financial markets and support near-term growth, it stops short of removing existing tariffs,” Michael Taylor, chief credit officer for the Asia-Pacific region for Moody’s Investors Service, the ratings firm, said in a note to investors. The firm said it continued to believe that the trade war would trim economic growth for both the United States and China.
In part because of a darkening outlook for growth, investors have become increasingly certain that the Federal Reserve will cut interest rates this month, helping to drive a sharp rebound in American markets last month. The S&P 500 rose 6.9 percent in June. And stocks in the United States started off trading in July by notching a record high in intraday trading.
In China, the Shanghai Composite Index closed up 2.2 percent on Monday, while the technology-heavy Shenzhen Composite Index closed 3.5 percent higher. Hong Kong markets were closed for a holiday.
Japan’s Nikkei 225 Index gained 2.1 percent. In Taiwan, the Taiex index was up 1.5 percent, while South Korea’s Kospi Index was roughly flat.
In European trading, Frankfurt’s DAX was up about 1 percent and the CAC 40 in Paris increased roughly 0.5 percent. London’s FTSE edged up about 0.3 percent.
https://www.nytimes.com/2019/07/01/business/global-markets.html
2019-07-01 16:06:02Z
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