(Reuters) – U.S. stocks rose on Tuesday, led by gains in industrials and a rebound in technology stocks, after a report that the United States and China hoped to resume talks to defuse a trade war between the world’s two largest economies.
Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., July 27, 2018. REUTERS/Lucas Jackson
Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to reengage in negotiations, Bloomberg reported, citing sources.
The escalating trade dispute, with the two countries levying tariffs on $34 billion of each other’s goods earlier this month, has weighed heavily on the equity markets. The likelihood of a respite boosted the markets, with nine of the 11 major S&P sectors higher.
“The most important influence on the markets today is some tempering of the trade war escalation,” said Bill Northey, senior vice president at U.S. Bank Wealth Management in Helena, Montana.
“There has been a pretty strong sell-off in technology stocks and we are getting a little bit of a relief rally ahead of some important earnings after markets close.”
After a three-day slide, the technology sector .SPLRCT rose 0.81 percent. Apple (AAPL.O), due to report after the bell, was up 1.1 percent and was the biggest boost to the S&P 500 and the Dow Jones Industrial Average.
Others in the so-called FAANG group — Facebook (FB.O), Amazon.com (AMZN.O), Netflix (NFLX.O) and Google parent Alphabet (GOOGL.O) — were up between 0.8 percent and 1.8 percent.
The industrial sector .SPLRCI jumped 2.12 percent and was on pace for its best one-day gain in three weeks. Boeing (BA.N), Caterpillar (CAT.N) and 3M (MMM.N) jumped between 2 percent and 3.3 percent.
At 12:43 a.m. EDT the Dow Jones Industrial Average .DJI was up 177.33 points, or 0.70 percent, at 25,484.16, the S&P 500 .SPX was up 20.29 points, or 0.72 percent, at 2,822.89 and the Nasdaq Composite .IXIC was up 68.11 points, or 0.89 percent, at 7,698.11.
Core personal consumption expenditures (PCE), the Federal Reserve’s preferred measure of inflation, rose 1.9 percent year-over-year in June, the Commerce Department said.
The Fed is expected to leave interest rates unchanged when it wraps up its two-day meeting on Wednesday and has forecast two more rate hikes by December.
The financial sector .SPSY fell 0.48 percent, with bank stocks the biggest drags on the S&P and the Dow.
Among stocks, Pfizer’s (PFE.N) shares rose 2.8 percent, reversing course from premarket losses, after the drugmaker’s quarterly results topped estimates.
Chipotle Mexican Grill (CMG.N) sank 5.9 percent after at least 140 people said they had fallen sick after eating at an Ohio restaurant of the burrito chain operator.
Advancing issues outnumbered decliners for a 2.71-to-1 ratio on the NYSE and a 2.34-to-1 ratio on the Nasdaq.
The S&P index recorded 16 new 52-week highs and one new low, while the Nasdaq recorded 24 new highs and 62 new lows.
Reporting by Amy Caren Daniel in Bengaluru; Editing by Shounak Dasgupta