US stocks jump as shutdown, trade fears recede

US stocks jump as news of a delay in new tariffs on Chinese imports.(AFP pic)

NEW YORK: Wall Street stocks jumped Tuesday as President Donald Trump downplayed the chance of another government shutdown and said he could delay new tariffs on Chinese imports.

The Dow Jones Industrial Average snapped a four-day losing streak, soaring more than 370 points to close up 1.5% at 25,425.76.

The broader S&P 500 rose 1.3%, closing at 2,744.73, while the tech-rich Nasdaq Composite Index also added 1.5%, closing at 7,414.62

The US president, while not ruling anything out, suggested his latest funding fight with congressional Democrats over border security would not result in another shutdown.

Trump told reporters he was not pleased with a deal by bipartisan lawmakers to offer nearly US$1.4 billion for a barrier along the southern US frontier – far less than the US$5.7 billion he initially sought.

“I can’t say I’m happy, I can’t say I’m thrilled,” Trump said. But he also told a Cabinet meeting in the White House: “I don’t think you’re going to see a shutdown.”

During a back-and-forth with reporters at the same meeting, Trump also said he would consider extending the deadline for a trade deal with China beyond March 1.

“If we’re close to a deal, where we think we can make a real deal… I could see myself letting that slide for a little while,” Trump said.

The comments came as the third round of trade negotiations were set to resume in Beijing to avert more than doubling tariffs on US$200 billion in Chinese imports.

Stocks were in positive territory prior to Trump’s remarks, but added to gains.

“We got good news on two hot-button issues,” said Jack Ablin, chief investment officer at Cresset Capital Management.

Tuesday’s gains were fairly broad-based, with Caterpillar, DowDuPont, Intel, 3M and UnitedHealth Group among the Dow members rising more than two%.

Cosmetics company Coty shot up 12.5% after JAB Holding Company proposed buying up to 150 million shares, raising its stake to about 60% of the company.

JAB manages the fortune of Germany’s Reimann family.

Gilead Sciences fell 3.3% after reporting disappointing clinical results of a treatment for cirrhosis.