The tech sector continues to take the markets ahead as indices hit new highs. The U.S. and China have resumed the phase one of the trade talks as the two giant economies plan to come to common grounds with their trade settlements.
On Tuesday, August 25, the stock market was brewing with fresh optimism and the US and China resumed trade talks again. The two major indices Nasdaq Composite and the S&P 500 hit their new all-time record highs.
After the major market knock-off in March 2020, both the indices have made a quick recovery. Since their intraday lows on March 23, 3030, the S&P 500 (INDEXSP: .INX) has surged 52% so far while the Nasdaq Composite (INDEXNASDAQ: .IXIC) has surged 72%.
Instead, they have already started rising even higher backed by investor confidence and fiscal stimulus. Also, on Tuesday, the S&P 500 closed 0.4% high at 4443 levels. On the other hand, the Nasdaq Compistive closed 0.7% higher at 11,466 levels.
The tech sector kept the market going with Facebook Inc (NASDAQ: FB) surging 3.5% and closing at $280 levels. Other tech giants like Alphabet, Amazon, and Microsoft were all 1% higher. While the worrying clouds of Coronavirus continue to hover around, the fiscal stimulus measures from the Fed have fueled positive hopes among Wall Street investors. Mark Hackett, chief of investment research at Nationwide, told CNBC:
“Equity investors continue to express cautious optimism on the direction of the economy and progress with the virus. Investor sentiment has shifted, with substantial optimism now embedded into the equity markets, driving valuations to the highest level since the technology bubble.”
Besides, in the biggest shake-up of the year, Dow Jones (INDEXDJX: .DJI) announced that Amgen Inc (NASDAQ: AMGN), Salesforce.com Inc (NYSE: CRM), and Honeywell International Inc (NYSE: HON) will replace replace Exxon Mobil Corporation (NYSE: XOM), Pfizer Inc (NYSE: PFE) and Raytheon Technologies Corp (NYSE: RTX) on the index.
U.S-China Trade Talks Pushed S&P 500 to Record High
Going through a strong trade war, the two biggest economies U.S. and China have resumed the trade talks again. In an official statement on Monday, August 24, the U.S. Trade Representative said:
Both sides are making “progress and are committed to taking the steps necessary to ensure the success of the” phase one trade deal. Besides, the two countries have also “addressed steps that China has taken to effectuate structural changes called for by the Agreement that will ensure greater protection for intellectual property rights”.
On the other hand, the Trump administration continues its crackdown on Chinese applications. Earlier this month, President Trump passed an executive order banning Chinese apps like TikTok and WeChat. To revoke this move, TikTok has also filed a lawsuit again the Trump government in court, earlier this week.
The U.S. lawmakers have raised concerns about data security thefts by the Chinese application. Reportedly, these apps have been supposed to pass data of the American citizens to the Chinese Communist Party (CCP). It will be interesting to see how things between the two giant economies pave-off going further.