Dow And Other Stocks Rally After Trump Confirms Meeting With Xi At G20
Stock prices increased globally amid positive sentiments towards a conclusion of the long-running trade war between China and the United States. US President Donald Trump announced on social media yesterday that he had a "very good" conversation with Chinese President Xi Jinping over the telephone and that they will definitely be meeting at the upcoming G20 summit in Japan next week.
Last week, Trump had said that he was going to be imposing additional tariffs on billions of dollars worth of Chinese imports if Xi was not going to be meeting with him at the G20 summit.
Global business leaders have been calling on the US and China to put an end to their trade war as it will likely end with everyone losing.
The notion of a positive outcome is now becoming more likely as Trump confirmed that their respective negotiating teams will be meeting ahead to begin talks prior to the official meet between the two leaders.
Following Trump's posts on social media, the White House issued a statement revealing that the Chinese president was open to developing a "fair and reciprocal economic relationship" and that both leaders will definitely be meeting face to face at the upcoming summit in Osaka, Japan.
The White House's statement further revealed that Trump and Xi had discussed how they would go about leveling the playing field for both countries and how they should address structural barriers.
The prospect of a possible conclusion to the ongoing trade dispute has sent stocks up all throughout the United States and other countries. The Dow Jones industrial average reached a peak of 400 points following the news, eventually closing 353 points higher. This was a massive 1.4 percent increase for the trading day. The S&P 500 finished with a 1 percent jump, while the NASDAQ Composite closed 1.4 percent higher.
The positive sentiments also boosted European stocks, with most closing in the green.
The news of Trump's scheduled meet with Xi was the icing on the cake after the European Central Bank President Mario Draghi revealed their intentions of monetary easing in the eurozone.
Trump and Xi last met at the previous G20 summit in Argentina late last year. Both leaders had agreed to work an amicable trade deal during their face to face meeting. However, things quickly fell apart after the US accused China of backtracking on its promises at the last minute.
China denied that it backtracked on the agreements. Following the dispute, Trump slapped increased tariffs on over $200 billion worth of Chinese imports to the United States. China immediately retaliated with its own tariffs on US products.