Stocks End Up on News of Trump/Xi G-20 Meeting
Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average ended up 353 points after President Donald Trump announced via Twitter that he and China’s President Xi Jinping “will be having an extended meeting next week at the G-20 in Japan.”
- Facebook (FB) shares were off slightly after it revealed plans for its “Libra” cryptocurrency. Facebook is Real Money’s Stock of the Day.
- MoneyGram International (MGI) soared after blockchain startup Ripple said it plans to invest up to $50 million in the company.
Wall Street Overview
Stocks ended up for the second straight day on Tuesday after President Donald Trump announced that he and China’s President Xi Jinping “will be having an extended meeting next week at the G-20 in Japan.”
Trump said in a tweet that he had “a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.”
China confirmed the get-together, Reuters reported.
The world’s two largest economies have been locked in a trade war and Trump has threatened to impose tariffs on $300 billion more in Chinese imports.
The G-20 meeting will be held in Osaka, Japan, on June 28-29.
The chip sector is among the most vulnerable to trade uncertainties because of extensive China exposure and major chipmakers rallied on the news, including Nvidia (NVDA) , AMD (AMD) , Micron (MU) , and Intel (INTC) .
The Dow Jones Industrial Average ended up 353 points, or 1.35%, to 26,465, the S&P 500 climbed 0.97%, and the Nasdaq advanced 1.39%.
The S&P 500 closed at 2,917.75 on Tuesday, less than 1 percent below its all-time closing high of 2,945.83, set on April 30.
Meanwhile, European Central Bank President Mario Draghi laid the foundation for a potential re-opening of the bank’s controversial quantitative easing program Tuesday, telling a conference in Portugal that it has room to buy more bonds in order to stoke inflation in the currency area just hours ahead of the Federal Reserve’s own two-day rate-setting meeting began in Washington.
Larry Kudlow, the director of the National Economic Council, said Trump is not planning to remove Jerome Powell as head of the Federal Reserve, despite White House’s persistent criticism, CNBC reported. A Bloomberg News report Tuesday said the White House had looked at such a move back in February. Asked whether he still wants to demote Powell, Trump told reporters “let’s see what he does,” after the market closed.
The Fed’s monetary-policy committee began another two-day meeting Tuesday, and the most-recent messaging from Powell has been that the central bank is still in patient mode. Based on the pattern, Powell is unlikely to surprise markets when the committee announces its decision at 2 p.m. ET Wednesday.
Facebook (FB) shares were off slightly to $188.47 as investors reacted to details of its “Libra” cryptocurrency plans revealed by its backers in a published white paper. Facebook is Real Money’s Stock of the Day.
Builders started 1.269 million new home-construction projects during May, the Census Bureau said, down from the prior month’s 1.29 million housing starts. But the figure still exceeded analysts’ expectations for 1.245 million new projects in May, based on a survey of economists by the data provider FactSet.
“Housing starts likely won’t move the needle much today given the holding pattern we’re in until tomorrow’s Fed comments,” said Mike Loewengart, vice president of investment strategy at E*Trade. “It’s a strong number, but it’s also down from the previous month, which gives both the bulls and the bears something to chew on. And when taken together with the broader sentiment that economic fundamentals are cooling, it’s likely this will add to the rising chorus that rates should be cut this summer, which can kick sectors like housing back into gear.”