U.S. equities and stock exchange traded funds pushed forward after President Donald Trump and Saudi Arabia sealed the deal on a multi-billion dollar arms contract.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were up 0.4% Monday.
The United States and Saudi Arabia signed a $110 billion deal where Riyadh will buy U.S. arms to help counter Iran, with options up to as high as $350 billion over the next decade, reports Tanya Agrawal for Reuters.
“The bar for success has been set extremely low for President Trump and it seems that he’s been able to meet that over the weekend,” Kim Forrest, senior equity research analyst at Fort Pitt Capital Group, told Reuters.
While the piece of good news for the industrial sector has helped keep markets going, many remain wary of ongoing political risks that may derail the Trump administration’s pro-growth agenda, such as Trump’s firing of former FBI head James Comey last week and reports of his administration’s links to Russia.
“Because we were down last week because of political news, the inverse is true too: that nothing bad happened over the weekend in political news,” Forrest added.
Observers fear that any further controversy in Trump’s administration would only serve to distract the president and his ability to push through expeditionary policies like tax cuts, deregulation and increased fiscal spending.
“Investors are growing skeptical,” Jack Ablin, chief investment officer at BMO Private Bank, said in a note. “The likelihood of President Trump’s pro-growth agenda getting signed into law is fading as the Administration and Congress fends off and sorts out the constant barrage of headlines.”
For more information on the markets and U.S. Stock ETFs, visit our S&P 500 category.