Tuesday’s Stock Market Open: US Equities Rise After Trump, Navarro Assure China Trade Deal Intact

Update: 12:05 p.m. EDT:

U.S. stocks maintained their gains as of noon on Tuesday.

The Dow Jones Industrial Average gained 240.6 points to 26,265.56, while the S&P 500 rose 31.47 points to 3,149.33 and the Nasdaq Composite Index climbed 137.63 points to 10,194.11.

In Europe markets finished higher, as Britain’s FTSE-100 rose 1.21%, while France’s CAC-40 climbed 1.39% and Germany’s DAX jumped 2.13%.

The Commerce Department said on Tuesday new home sales jumped 16.6% to a seasonally adjusted annual rate of 676,000 units last month.

Original story:

U.S. stocks rose on Tuesday after White House officials clarified comments about the status of the U.S.-China trade deal.

The Dow Jones Industrial Average gained 225.03 points to 26,249.99, while the S&P 500 rose 24.86 points to 3,142.72 and the Nasdaq Composite Index climbed 69.76 points to 10,126.24.

There was confusion over comments made by White House trade advisor Peter Navarro over the status of the U.S.-China trade deal. In an interview on Fox News on Monday, Navarro suggested the deal was “over.” In a subsequent statement, Navarro clarified that his words were misconstrued and that the China deal remains in place.

“I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world,” he stated.

President Donald Trump also tweeted to confirm the existing trade deal with China.

“The China trade deal is fully intact. Hopefully they will continue to live up to the terms of the agreement,” Trump tweeted.

Clete Willems, a former top White House trade negotiator, also asserted the trade deal will be implemented.

“From an election standpoint, this deal remains a winner for [Trump] because he was able to get China to make certain commitments that others have failed to do and the U.S. really didn’t … give up much in exchange,” Willems said. “They kept almost all of the tariffs in place. So, it still allows the president to say he’s tough and he got a deal.”

The purchasing managers’ index in June for the euro zone from IHS Markit showed the “downturn eased markedly for a second successive month in June.”

The flash eurozone PMI came in at 47.5, up from 31.9 in May.

“The flash eurozone PMI indicated another substantial easing of the region’s downturn in June,” said Chris Williamson, chief business economist at IHS Markit. “Output and demand are still falling but no longer collapsing. While second quarter GDP is still likely to have dropped at an unprecedented rate, the rise in the PMI adds to expectations that the lifting of lockdown restrictions will help bring the downturn to an end as we head into the summer.”

Meanwhile, confirmed cases of covid-19 continue to climb in the U.S. and overseas.

But White House economic adviser Larry Kudlow assured on Monday there is no second wave of coronavirus coming and that Washington lawmakers will likely create another economic stimulus package by the end of next month.

“The message… may be that the virus and the bull market can coexist,” said Jim Paulsen, chief investment strategist at the Leuthold Group. “Despite back-to-back days of Covid-19 cases above 30,000 over the weekend and ongoing reports of hot spots, the stock market managed to post a strong gain [Monday]. Market action seems to suggest that investors expect the economy to continue improving in the months ahead even though the country is likely to experience spotty or temporary spikes in the virus.”

Overnight in Asia, markets finished higher. The Shanghai Composite edged up 0.18%; Hong Kong’s Hang Seng jumped 1.62%; while Japan’s Nikkei-225 gained 0.5%.

In Europe markets traded higher, as Britain’s FTSE-100 rose 1.23%, while France’s CAC-40 climbed 1.48% and Germany’s DAX jumped 2.42%.

Crude oil futures rose 0.54% at $40.95 per barrel, Brent crude climbed 0.67% at $43.36. Gold futures rose 0.79%.

The euro rose 0.54% at $1.1323 while the pound sterling edged up 0.08% at $1.2481.