US open: Stocks turn green as US-China truce takes S&P 500 to record high
Wall Street surged at the open on Monday as participants digested news coming from China, Japan and North Korea over the weekend.
As of 1530 BST, the Dow Jones Industrial Average was ahead 0.73% at 26,794.37, while the S&P 500 was up 0.88% to 2,967.60 and the Nasdaq Composite traded 1.22% firmer at 8,103.56.
While stocks closed only slightly higher on Friday, the Dow stormed out of the gate on Monday, adding 194 points, and the S&P 500 hit a new record after Xi Jinping and Donald Trump agreed to halt further tariffs on products from their respective nations as part of an effort to resume trade talks.
Trump said the meeting between the pair had gone as well as it could have, noting: "We are right back on track," while Chinese state-run news outlet Xinhua said the two leaders had agreed "to restart trade consultations between their countries on the basis of equality and mutual respect."
The US President also revealed Washington would ease restrictions on American companies selling products to telco giant Huawei - boosting chipmakers such as Skyworks Solutions, Micron Technology, Qualcomm and Broadcom by more than 5% each.
However, despite the positive developments Larry Kudlow, director of the National Economic Council, stated that Trump was not granting Huawei a "general amnesty" and also cautioned that there was no timetable for finalising a deal as of yet.
In terms of Fed speak, the US central bank's second-highest ranking official reiterated the monetary authority's readiness to act "as appropriate" in order to sustain the economic expansion, strong labour market and price stability, while noting the potential impact that uncertainty about trade policy might have on business investment.
Speaking overnight at a Bank of Finland conference, in Helsinki, Federal vice chairman Richard Clarida said: "We will certainly act as appropriate to put in place policies that sustain the economic expansion, and the strong labour market and price stability."
On the data front, the US manufacturing sector was unexpectedly resilient in June, bolstered by small gains amidst the country's ongoing trade war with China and a slowing economy.
The IHS-Markit Purchasing Manager's Index came to 50.6 last month, up from the 50.1 recorded a month earlier and in line with expectations, while the ISM Manufacturing Survey also beat market expectations - dipping to 51.7 from the 52.1 seen in the previous month and above Wall Street's estimates of 50.0.
Elsewhere, construction spending unexpectedly fell in May as investment in private construction projects dropped to its lowest level in almost two and a half years.
Construction outlays came in weaker than expected at -0.8% - versus estimates of 0.0% - but was partially offset by a revision to 0.4% from 0% in the previous month.
In corporate news, Apple, Caterpillar and FedEx all collected more than 2% in early trade on the back of the Huawei news, while Applied Materials rose 3.72% after announcing that it would acquire Kokusai Electric.