US Markets

Dow posts 7-day winning streak, inches closer to record after tariff delay and ECB rate cut

Hondius' Matthews: Would invest in precious metals, safe-haven assets
Hondius' Matthews: Would invest in precious metals, safe-haven assets

Stocks rose on Thursday, approaching record levels, as Wall Street digested a slew of U.S.-China trade news along with a large bond buying program from Europe's central bank.

The Dow Jones Industrial Average closed 45.41 higher, or 0.2% at 27,182.45, posting a seven-day winning streak. The S&P 500 gained 0.3% to 3,009.57 to notch its third straight gain. The Nasdaq Composite advanced 0.3% to 8,194.47.

President Donald Trump agreed on Wednesday to delay an additional increase in tariffs on Chinese goods by two weeks "as a gesture of good will." The move raised hopes of a thaw in trade frictions between the world's two largest economies.

Chipmakers such as ON Semiconductor and Advanced Micro Devices rose 0.9% and 1.5%, respectively. The tech sector was the best performer in the S&P 500, led by a 3% gain in PayPal. Microsoft also closed 1% higher.

U.S. President Donald Trump meets with China's President Xi Jinping at the G20 leaders summit in Japan, June 29, 2019.
Kevin Lamarque | Reuters

The U.S. and China have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment. Trade officials from both sides are expected to hold talks in Washington in early October.

"It's a work in progress," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, about the trade situation. "Both sides are posturing. The timing and magnitude of any new trade agreement remains unknown with no indication that either side is willing to concede on structural issues."

Wall Street watches for more hints of US-China trade deal—Three experts break down what's next
Wall Street watches for more hints of US-China trade deal—Three experts break down what's next

Sandven added trade will impact the market "for the foreseeable future" but noted stocks have already had a "banner year."

The Dow ended Thursday's session 0.6% below an all-time high set July 16 while the S&P 500 closed 0.8% below its July 26 record. The Nasdaq, meanwhile, is 1.7% below its record high.

Stocks were subject to a brief bout of volatility earlier on Thursday after Bloomberg News had reported earlier that President Donald Trump's advisors were considering such a deal, sending the major indexes to their session highs. The major indexes later pared those gains after a senior White House official told CNBC the administration is "absolutely not" considering an interim deal with China.

Treasury Secretary Steven Mnuchin told CNBC's "Squawk Box" that Trump could strike a trade deal with China at any moment, but wants a "good" deal for American workers.

Elsewhere, investors digested the latest decision from policymakers at the European Central Bank. The ECB cut its deposit rate by 10 basis point and launched a new bond buying program. The bank will buy €20 billion worth of assets for as long as needed.

The euro dropped before trading 0.5% higher. Gold futures climbed 0.3% to $1,507.40 per ounce.

"The question remains whether this will be enough to reverse the damage caused by the geopolitical disturbances that have undermined corporate and investor confidence (at least towards cyclical assets) in recent months," said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note. "Given the extremes to which allocations were pushed in the last part of August we believe that we might have reached an important turning point that will see relative performance trends change quite markedly in the weeks ahead."

—CNBC's Sam Meredith contributed to this report.

President Trump's tariffs will make these ordinary things more expensive
President Trump's tariffs will make these things more expensive