(Reuters) – A rally in technology stocks boosted Wall Street on Wednesday, as investors cheered media reports signaling an ease in trade tensions between the United States and China ahead of high-level talks starting Thursday.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 2, 2019. REUTERS/Brendan McDermid
Chipmakers with a sizable exposure to China also gained, with the Philadelphia SE Semiconductor index .SOX up 1.68%.
China was still open to agreeing to a partial trade deal with the United States, despite the inclusion of top Chinese artificial intelligence startups in a trade blacklist, according to a Bloomberg report.
Separately, the Financial Times said Beijing was offering to increase its annual purchases of U.S. agricultural products.
“There are expectations that some sort of an interim deal will emerge from these meetings,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. “Investors certainly seem more hopeful now than they did two days ago.”
Escalating trade tensions, intensifying efforts to impeach President Donald Trump and signs of slowing economic growth rocked equity markets in October, with the S&P 500 and Dow Jones indexes off more than 2% since the end of September.
A sharp contraction in U.S. manufacturing data, as well as a dismal reading on business activity last week has raised bets of a third interest rate cut by the Federal Reserve this year.
Fed Chair Jerome Powell flagged openness to further rate cuts on Tuesday, repeating that the central bank would act “as appropriate” amid an economy that he said was likely to continue to expand.
The session’s gains were