U.S. stocks rose Monday, but closed off from earlier highs, led by technology stocks, helped by optimism that the U.S. -China trade talks will make progress and signs that the United States may suspend sanctions against Huawei, a Chinese telecom equipment giant.
Despite losing some of its initial momentum, the S& P 500 index managed to close at a record high as the United States and China agreed to resume trade negotiations on Saturday. In addition, President Trump made some concessions, including not imposing new tariffs and relaxing restrictions on Huawei Technologies Limited. Meanwhile, China agreed to buy more U.S. agricultural products, but did not specify the scale of purchases.
But the stock market reversed most of its early gains, and investors wondered whether the Federal Reserve (FED/Fed) would be as pigeonholed as recently anticipated, and that the July 4 holiday could lead to light trading this week, thus making the market more cautious.
"The market celebrates the progress of Sino-US trade at the opening of the market. Usually if trade uncertainty subsides, such market reaction will occur. Even if the trade problem has not been solved, it can be said that it reduces the possibility that the Federal Reserve needs to intervene, or at least as much as people thought a week and a half ago," said Willie Delwiche, investment strategist at Robert W. Baird.
Technology stocks, the best performing sector so far this year, rose 1.45%, with Apple (AAPL.O) up 1.83%, bringing the biggest boost.
Shares of chipmakers with large revenues from China jumped by as much as 5 per cent in the session, and the Philadelphia Semiconductor Index rose by 2.65 per cent. Huawei supplier Meguiar Technologies (MU.O) climbed 3.9%.
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