The Dow Jones Industrial Average gained 157 points, led by Caterpillar. The S&P 500 rose 0.4 percent as energy and tech outperformed. The Nasdaq Composite also climbed 0.56 percent.
Discussions between Washington and Beijing over trade concluded on Wednesday. U.S. Under Secretary of Agriculture for Trade and Foreign Agricultural Affairs Ted McKinney said earlier on Wednesday that he thought negotiations “went just fine.” He added: “It’s been a good one for us.”
Caterpillar rose more than 1 percent. The stock is largely seen as a bellwether for trade because of the company’s exposure to overseas markets.
The meetings this week were the first between U.S. and China officials since President Donald Trump and Chinese President Xi Jinping agreed to a 90-day truce in December to the two countries’ ongoing trade war. Both countries have been engaged in a tense sparring of tariffs, targeting billions of dollars’ worth of imports in each other’s economies with levies.
Ed Yardeni, president and CIO of Yardeni Research, said China could move quickly to strike a deal with the U.S. to avoid further economic pain.
“Lately, it seems to have gotten so bad for China domestically that it may have no choice but to make a trade deal in favor of the US, which could be a boon to US and global equity markets,” Yardeni said in a note. “More evidence recently has confirmed my earlier hypothesis about China’s weakness,” he added, citing Apple’s quarterly revenue warning from last week as well as deteriorating leading indicators like purchasing managers’ indexes.
The recent tone shift around U.S-China trade talks has helped boost stocks recently. On Tuesday, the Dow notched its first three-day winning streak since late November.
However, investors also kept an eye on the ongoing government shutdown. Ratings agency Fitch warned Wednesday it may cut the U.S.’ triple-A rating if the shutdown continues.