Global stocks rose Wednesday, buoyed by optimism that U.S. and Chinese negotiators would be able to reach at least a partial trade deal in time to avert another round of tariffs.
President Trump said at a cabinet session Tuesday that he was willing to push back a March 1 deadline for a trade agreement if ongoing talks between the U.S. and China appeared to be moving along.
Stocks around the world rose, with the Stoxx Europe 600 up 0.3% and major indexes in Shanghai, Japan and Hong Kong up more than 1% apiece. That followed a rally in the U.S., where the Dow Jones Industrial Average surged nearly 400 points Tuesday.
But with details for what a trade agreement would look like still in flux, some analysts have warned against taking too much comfort in initial reports about the negotiations.
“A deal will certainly help jump-start China, the U.S. and the broader global economy,” said Yousef Abbasi, director of U.S. institutional equities and global macro strategist at INTL FCStone, in an email. But a number of key questions still remain unresolved, Mr. Abassi said, including how far China is willing to go on issues like intellectual property protection.
“Longer term, it’s very hard to have a view on the potential for a deal without more information,” he said.
A string of corporate earnings results helped buoy European stocks on Wednesday.
Shares of U.K.-based Tullow Oil rose 5.2% after the oil-and-gas company reported swinging to a profit in 2018.
Home furnishings retailer Dunelm Group jumped 3.4% after reporting profit and revenue rose for the six month period through the end of December, while Heineken shares rallied 5.2% after the brewing company delivered better-than-expected earnings.
In the U.S., investors are expected to get quarterly results from companies including Cisco Systems, Yelp and Marathon Oil after the closing bell.
Futures pointed to the S&P 500 and Dow Jones Industrial Average futures rising 0.1% apiece. Changes in futures don’t necessarily reflect moves after the opening bell.
Bond yields edged higher as the advance in stocks cooled demand for the safety of sovereign debt.
The yield on the benchmark 10-year U.S. Treasury note recently traded at 2.691%, compared with 2.685% Tuesday. Yields rise as bond prices fall.
Later Wednesday, traders will be parsing fresh data on U.S. consumer prices, which should offer clues on whether inflation pressures retreated further in January following a muted reading for December. Economists surveyed by The Wall Street Journal expect the consumer-price index—which measures prices for goods ranging from cereal to medicine—to have risen 1.5% in January from the year prior.
Relatively muted inflation readings have helped reassure investors that the Federal Reserve has justification to pause its interest-rate increases for now.
That in-turn has helped stocks grind higher, although the S&P 500 and Dow industrials remain below their all-time highs.
Write to Akane Otani at [email protected]