The Dow Jones Industrial Average rose 0.7% at 26,357 while the S&P 500 index is up 0.9% at 2,918 and the Nasdaq by 1% at 7,903. The ten-year Treasury yields also approached 1.6%.
The markets strengthened on the back of the revived hopes from China, progress is seen in trade talks with the Trump administration this week.
Though a broad agreement seems unlikely, China is open to a limited deal, provided no more tariffs are imposed. In return, Beijing would offer a non-core concession — increase the purchase of agricultural products from US farmers by 50%.
“If we can get the two sides to agree to not raise tariffs any further than where they are, that would be positive,”
said Randy Frederick, a vice president at Charles Schwab.
Another reason behind the market's positive reaction is the Federal Reserve Chairman Jerome Powell’s statement on Tuesday where he said the Fed will resume purchase of Treasury securities to avoid a repeat of the recent turmoil in money markets.
He further hinted at the possibility of another rate cut and investors are looking to gauge the next move by the major central banks.
Gold, BTC, Crypto Market Up
As Powell said, “[The Fed will] soon announce measures to add to the supply of reserves over time,” gold-headed higher at around $1,512 an ounce.
It’s not just stocks and gold that is rising, Bitcoin is also enjoying the greens.
More Gains Ahead
According to Stephen Suttmeier, chief equity technical strategist at Bank of America Merrill Lynch, post-Halloween period likely to bring more treats for equities with 3,100 as the year-end target for the index.
“There’s actually upside towards that 3,200 area if that bullish seasonality kicks in on the S&P,”
With S&P looking at new highs, as per Tom Lee’s BTC narrative that the flagship cryptocurrency will see new highs when the stock market will, Bitcoin might be in for more gains.
Moreover, the next round of balance sheet expansion, increasing the purchases of short-term Treasury securities, by the Fed will further push BTC up.