NEW YORK (Reuters) – Global stocks rallied and bonds retreated on Monday as the United States and China agreed to restart trade talks at the G20 summit over the weekend, leading investors to bet that a breakthrough between the world’s two largest economies would jumpstart global economic growth.
The United States and China agreed on Saturday to resume trade negotiations after U.S. President Donald Trump offered concessions to his Chinese counterpart Xi Jinping when the two met at the sidelines of the Group of 20 summit in Japan.
Those included no new tariffs and an easing of restrictions on tech company Huawei [HWT.UL]. China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table.
“It played out as well as possible,” said Hans Peterson, SEB Investment Management’s global head of asset allocation. “It gives us time to digest and get a bit better activity in the global economy.”
Broad gains in Europe and Japan and fresh record highs in the U.S. market pushed MSCI’s broadest global index .MIWD00000PUS up 0.3%, adding to a rally that has been one of the global stock market’s best first halves to a year ever. The benchmark S&P 500 index surpassed its previous record high of 2,964.15, hit on June 21.
On Wall Street, the Dow Jones Industrial Average .DJI rose 178.83 points, or 0.67%, to 26,778.79, the S&P 500 .SPX gained 25.02 points, or 0.85%, to 2,966.78 and the Nasdaq Composite .IXIC added 97.02 points, or 1.21%, to 8,103.26.
“Any step towards a trade resolution, and it doesn’t have to be a lot of progress – just a step, is viewed very positively by markets,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. “And investors at this point are trying to focus on the