Market Update: U.S. Stocks Cap Off Stellar Month With Gains

U.S. stocks advanced Tuesday, capping off a stellar month of growth on reports that China and the United States are looking to avert an escalating trade war between the two countries.

Stocks Rise

All of Wall Street’s major indexes finished in positive territory on Tuesday. The large-cap S&P 500 Index rose 0.5% to 2,816.29, with eight of 11 primary sectors contributing to the gains. Industrials were the top performers, gaining 2.1% as a sector.

Dow industrials advanced 107.81 points, or 0.4%, to 24,414.64. Most of the companies in the Dow 30 finished in positive territory.

The technology-heavy Nasdaq Composite Index climbed 0.6% to 7,671.79.

U.S.-China Trade Talks to Resume: Report

Bloomberg News reported on Tuesday that officials from China and the U.S. are looking to revive trade negotiations between the two superpowers. Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are said to be leading efforts to resume dialogue on free trade.

The report cited no timelines for when negotiations may resume. People familiar with the matter said more discussion is needed before formal talks can begin.

In early July, the Trump administration implemented tariffs on $34 billion in Chinese goods. The next wave of levies, which target $16 billion in Chinese product, is set to kick in as early as this week.

U.S. President Donald Trump has threatened tariffs on up to $500 billion in Chinese goods if Beijing dos not adopt fairer trade practices. That figure represents roughly one year of Chinese exports to the U.S.

Bringing both sides to the negotiating table won’t be easy in light of Washington’s 301 investigation, which was led by Trade Representative Robert Lighthizer. The investigation, which concluded that China was stealing American intellectual property, sparked the first wave of tariffs.

Economic Calendar in Focus

U.S. economic data on Tuesday were largely in line with expectations, though a key measure of core inflation lagged analysts’ forecasts.

The Commerce Department reported that personal income from all sources rose 0.4% in June following a similar increase the previous month. A separate gauge of personal spending, which approximates consumption, also rose 0.4% month-on-month.

The core personal consumption expenditure (PCE) index – the Federal Reserve’s preferred measure of inflation – rose 2.2% annually in June. Analysts had forecast 2.3%.

In a separate report, ISM-Chicago said its indicator of regional business trends rose in July to the highest level in seven months.

The MNI Chicago Business Barometer rose to 65.5 from 64.1 on a scale where 50 separates expansion from contraction.

Featured image courtesy of Shutterstock. 

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi