Merkel to the rescue as Wall Street gains

WALL Street’s major indexes rose yesterday as reports that the US and the European Union may agree to withdraw vehicle tariffs fostered optimism on international trade relations among investors.

German Chancellor Angela Merkel said she would back lowering EU tariffs on US car imports. An industry source told Reuters that the US ambassador to Germany, Richard Grenell, had mentioned to German car executives that US President Donald Trump could abandon threatened tariffs on imported European cars if in return the European Union scrapped duties on US cars.

US stocks added to gains in the last hour of trading after having slightly pared gains upon the release of minutes from the Federal Open Market Committee’s June meeting.

The minutes reflected confidence among the Federal Reserve’s policymakers in the strength of the US economy and its plans for future interest-rate hikes. In the June meeting, the Fed increased rates for the second time this year, and it has signalled that additional increases are likely.

Technology stocks led gains on the S&P 500, with shares of several chipmakers rising. The Philadelphia semiconductor index rose 2.7 per cent.

“The fact that EU and US officials are discussing proposals to eliminate certain tariffs on auto imports, that’s helping sentiment and calming fears of an escalating trade war,” said Ryan Larson, at RBC Global Asset Management in Chicago.

The Dow Jones Industrial Average rose 181.92 points, or 0.75 per cent, to 24,356.74, the S&P 500 gained 23.39 points, or 0.86 per cent, to 2,736.61 and the Nasdaq Composite added 83.75 points, or 1.12 per cent, to 7,586.43.

Chipmaker Micron Technology’s shares rose 2.6 per cent after the company forecast only a small hit from a temporary ban on some sales in China.

This article provided by NewsEdge.