U.S. markets and stock exchange traded funds rallied Monday as investors pared back the previous session’s losses that were triggered by speculation Washington was considering delisting Chinese companies from U.S. exchanges.
On Monday, the Invesco QQQ Trust (NASDAQ: QQQ) was up 1.0%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) rose 0.6%, and SPDR S&P 500 ETF (NYSEArca: SPY) gained 0.7%.
Markets plunged Friday on talks that the U.S. would cube Chinese companies’ access to U.S. capital markets, but on Monday, White House trade adviser Peter Navarro dismissed the claims as “fake news,” Reuters reports.
Washington and Beijing are scheduled to hold a round of high-level talks in October. Some looked to the recent bout of volatility as another means of posturing ahead of the negotiations.
“This idea of using different types of levers that impact the trade negotiations is something that we will get accustomed to,” Phil Blancato, chief executive officer of Ladenburg Thalmann Asset Management, told Reuters.
As the third quarter comes to a close, the main U.S. indices were on pace to end on their worst quarterly performance so far this year, with markets oscillating wildly due to new developments in the U.S.-China trade war and mixed economic data. The S&P 500 and Dow Jones Industrial Average are on track for their weakest percentage gain in three quarters while the Nasdaq was heading for a slight dip.
Looking ahead, investors will watch for additional economic updates from a key jobs report and the September ISM purchasing managers index (PMI).
Any continued weak data could also further support a looser monetary policy out of the Federal Reserve. JPMorgan Chase & Co. analysts expect almost two dozen more global central banks to slash rates in the fourth quarter, and they also expect the Fed to cut rates again this year, the Wall Street Journal reports.
“Every time there’s bad news, it’s actually good news because it means our saviors at the central banks are going to continue to support the markets,” Nick Clay, a portfolio manager at Newton Investment Management, told the WSJ.
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