The Dow is surging on news that the U.S. and China have reached a partial trade deal — phase one. Because it is considered a substantial trade deal, tariff hikes that were set to kick in next week were delayed.
The Chinese media call it a “pause.”
The President is putting a deal together in pieces as opposed to a grand deal. The Chinese always said they would agree to a small deal.
The Dow Jones Industrial Average surged 319.92 points, or 1.2% to close at 26,816.59. The S&P 500 rose 1.1% to 2,970.27, while the Nasdaq Composite jumped 1.3% to 8,057.04. The gains helped the Dow and S&P 500 snap a three-week losing streak. The Dow and S&P 500 gained 0.9% and 0.6%, respectively, for the week. The Nasdaq ended the week up 0.9%.
Trump said the deal will be written over the next three weeks after meeting with Chinese Vice Premier Liu He in the Oval Office.
He asked the Vice Premier to congratulate President Xi.
Trump says the U.S. and China have agreed to the first phase of a trade deal on currency, agricultural purchases and some aspects of intellectual property protections.
There is still more to be negotiated, and nothing is in writing.
The sticking point is Chinese agreeing to not engage in intellectual theft, but there is hope they will agree to something.
Trump told reporters at the White House that the two sides are very close to ending the trade war and it will take up to five weeks to get the deal written. He spoke after talks with Chinese Vice Premier Liu He.
U.S. Treasury Secretary Steven Mnuchin told reporters Trump had agreed not to proceed with a hike in tariffs to 30% from 25% on about $250 billion in Chinese goods that were supposed to have gone into effect on Tuesday.
— CBS News (@CBSNews) October 11, 2019
As an aside, Michael Pillsbury, an informal White House advisor on China, said that the President asked for information on Hunter Biden and the Chinese allegedly provided information to him.
Pillsbury told this to the anti-Trump Financial Times. He said he got quite a bit of background on Hunter Biden.