Stocks hit record high on China-U.S. trade deal optimism

A trade deal would halt heavier U.S. tariffs and Chinese rare earths export controls, helping allay some recent concerns among investors about relations between the world’s two largest economies

Global stocks rallied on Monday to a new intraday record on optimism that a potential trade deal was on the horizon between China and the U.S., as investors awaited a slew of central bank policy announcements and earnings from several megacap companies.

Top Chinese and U.S. economic officials on Sunday hammered out the framework of a trade deal for Chinese counterpart Xi Jinping and U.S. President Donald Trump to decide on at a meeting in South Korea scheduled for Thursday.

Trump said he thought a deal would be reached with China and announced a flurry of deals on trade and critical minerals in Malaysia with four Southeast Asian nations during the first stop of a five-day Asia trip.

A trade deal would halt heavier U.S. tariffs and Chinese rare earths export controls, helping allay some recent concerns among investors about relations between the world’s two largest economies.

On Friday and over the weekend we heard there’s going to be positive things coming out of the Trump and Xi meeting. The market’s still up on that, said Scott Wren, senior global market strategist at Wells Fargo Investment Institute in St. Louis, Missouri.

I don’t think the market expects some complete deal out of this, but I think they expect some grain sales, some assurance that these rare earth elements are going to continue to be exported by China – just an easing of tensions to some extent, he added.

Meanwhile, U.S. stocks showed strong gains, led in part by gains in technology stocks, including a surge of more than 11% in Qualcomm shares after it unveiled two artificial intelligence chips for data centres, with commercial availability from next year.