Several market movement events took place between the closing of the US stock markets. UU. Wednesday and Thursday's opening. As a result, the Dow Jones Industrial Average and the S&P 500 were at the peak of historical highs on Thursday.
This is what investors should know.
The future of the stock rose Wednesday night after President Donald Trump announced that he would delay the planned increase in tariffs on Chinese products in 15 days, as a "gesture of goodwill." Tariffs are expected to increase to 30% from 25% by approximately $ 250 billion in Chinese products. Treasury secretary Steven Mnuchin told CNBC on Thursday morning that the president "could make a deal at any time" with China, but will not do so until "it is a good deal."
"The president delayed him due to a request from the Deputy Prime Minister," Mnuchin added. He clarified that China's deputy prime minister, Liu, made the request because October 1 is the 70th anniversary of the establishment of the People's Republic of China and said raising tariffs that day "caused them great concern over symbolism."
The ECB lowers rates
On Thursday morning, the European Central Bank (ECB) announced a cut in its deposit rates by 10 basis points, to a negative 0.5%. The ECB also announced an important bond purchase program of 20 billion euros per month, as part of its quantitative easing initiative (QE). Initially, the euro fell to its lowest level against the dollar in almost two weeks, but then recovered, standing at around $ 1,104, as currency investors remain restless about whether ECB policies will successfully increase inflation . In addition, bond yields in the euro zone fell, and Germany's 10-year reference bond yield fell to 0.64% negative.
Investors were happy that the ECB was trying quantitative easing again, hoping that the new program would shake the global economy.
Approximately one hour before the opening of US stock markets on Thursday, the Labor Department reported that consumer prices slowed last month. The Consumer Price Index, which is used as a measure of inflation, increased only slightly in August. However, the central CPI measurement increased to 2.4% year-over-year, the highest level since 2008.
Moderate inflation is likely to keep the Federal Reserve on track to reduce interest rates next week.
Stock indexes near historical highs
Both the Dow and the S&P 500 entered the price on Thursday less than 1% below the historical highs established in July. After Thursday's earnings, the Dow and the S&P 500 were approximately 0.5% of new registrations. The Dow is looking to beat an intraday record of 27,398.68, while the S&P 500 is approaching its previous record of 3,027.98 points.
Initially, the stock began trading higher on Thursday, with gains backed by a report that the Trump administration was considering an interim trade agreement with China. But equities cut profits quickly after a senior White House official denied the report. The official told CNBC that the Trump administration "absolutely not" is considering a limited trade agreement to delay or eliminate tariffs on China.
However, the stock recovered again with stocks like Apple and Amazon leading the gains.