Wall Street ends the week on a strong note, DJIA posts 8th straight weekly gains
|- Trade optimism helps Wall Street close the week on a positive note.
- Financials and energy lead the rally on Friday.
Major equity indexes in the U.S. started the day in the positive territory and extended their gains on renewed optimism surrounding the U.S.-China trade conflict. Reflecting the strong appetite for risk, the CBOE Volatility Index, Wall Street's fear gauge, dropped more than 8%.
After Chinese news agency Xinhua reported that the U.S. and Chinese officials were able to reach consensus on major issues in these week's talks, President Donald Trump confirmed this week's progress in trade talks by saying that they were very close to having a real trade deal with China. Trump further announced that he was planning to meet his Chinese counterpart Xi following the next round of trade negotiations in Washington next week. Furthermore, President Trump signed the spending bill to avoid another government shutdown but declared a national emergency in order to receive the funds that he needs to build the border wall.
Commenting on these developments, "It’s a relief rally, now that Trump is going to sign the (spending) bill and (the) China trade (dispute) looks like its coming to a resolution. It’s going to be a long process but it’s looking positive,” Doug Cote, chief market strategist at Voya Investment Management in New York, told Reuters.
Positive market mood boosted the yields on the T-bond yields and the rate-sensitive S&P 500 Financials Index gained more than 2% on the day. Moreover, trade optimism allowed crude oil to extend its rally and allowed the S&P 500 Energy Index to close 1.6% higher.
When the closing bell rang, the Dow Jones Industrial Average was up 1.7%, the S&P 500 and the Nasdaq Composite were up 1.04% and 0.42%. For the week, these three indexes added 3.1%, 2.5%, and 2.4% respectively.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.