Stocks Soar Higher as Trade War Fears Ease, Dow Climbs 669 Points

NEW YORK, NY - MARCH 23: Traders work on the floor of the New York Stock Exchange (NYSE) on March 23, 2018 in New York City. Despite yesterday's massive loss due to trade war fears with China, the Dow started the day up over 70 points. (Photo by Spencer Platt/Getty …

Stocks surged higher Monday, with major indexes climbing by close to 3 percent.

The Dow Jones Industrial Average climbed by 669 points, or 2.84 percent. The S&P 500 rose 2.7 percent. The Nasdaq Composite was up 3.26 percent. The Russell 2000 index of small cap stocks rose 2.14 percent.

Investors were cheered by signs that the Trump administration’s trade policies appear to be producing cooperation and compromise rather than sparking a trade war.

  • Treasury Secretary Steven Mnuchin told Fox News that he is “cautiously hopeful” that a trade deal can be reached with China.
  • The Financial Times reported that China is stepping up its efforts to avoid a trade war in part by buying more U.S. manufactured microchips.
  • South Korea also announced that it has reached a trade deal with U.S that will permanently exempt the country from the new steel tariffs while limiting shipments of the metal to about 2.7 million tons a year.
  • Peter Navarro, Trump’s top trade adviser, told CNBC that “it looks like we might get a really great deal on NAFTA.”
  • Navarro, who is the author of a book titled Death by China, even sounded positive about China, saying: “We’re hopeful there that the Chinese will work with us to basically address some of these practices” that the administration describes as “forced technology transfer.”

It wasn’t just good news on trade that helped. CNBC’s Jim Cramer also points to the lack of a “knock out blow” from the 60 Minutes interview with Stormy Daniels.  On Friday, there was some fear that the interview with the porn actress could be crippling to the Trump presidency in some way. On Monday, the consensus view was that that interview was, as Breitbart’s John Nolte put it, “a big fat nothing.”

Shares of Facebook sat out the rally after the Federal Trade Commission announced it is investigating the company’s data practices. Most of the big tech stocks, however, rose. Microsoft rose 7 percent. Semiconductor stocks did very well, most likely because of the news that China plans to buy U.S. made chips.