New York: US stocks forged higher on Monday, adding to last week’s steady gains, after President Donald Trump said Washington could ease sanctions on the Chinese telecoms equipment maker ZTE.
Markets took Trump’s tweet Sunday saying he would try to help ZTE as a sign trade tensions between Washington and Beijing could be moderating.
About 10 minutes into the first trading session of the week, the benchmark Dow Jones Industrial Average had risen 0.4 percent to 24,929.62.
The S&P 500 gained 0.3 percent, rising to 2,736.62 while the tech-heavy Nasdaq moved up 0.5 percent, reaching 7,436.36.
ZTE, which employs 80,000 people, said last week its major operations had “ceased” after the US Commerce Department banned American firms from selling crucial technology to the company for seven years, raising the possibility of its collapse. Washington said the company violated rules on shipping technology to Iran and North Korea.
Trump on Sunday cited Chinese job losses and said he and Chinese President Xi Jinping were working to get ZTE “back into business.”
But Patrick O’Hare of Briefing.com said trade tensions with Europe, another flash-point in Trump’s trade policies, could flare even higher.
The Trump administration has warned European countries they could face sanctions if they do business with Iran following Trump’s withdrawal from a 2015 nuclear agreement.
“So, there is a net positive headline regarding US dealings with China and a seemingly net negative headline on potential dealings with Europe,” O’Hare said in an market analysis.
Still, US suppliers of equipment to ZTE saw their shares rise: Acacia Communications jumped 13.46% and Oclaro added 5.7 percent
Meanwhile, Xerox fell 8.4 percent after the company scrapped plans for a $6.1 billion deal with Fujifilm Holdings.