Markets closed in the green on Monday after President Trump announced that he was suspending plans to impose tariffs on Mexico. Such developments boosted the investor sentiment. Further, the three major benchmarks ended in the positive territory.
The Dow Jones Industrial Average (DJI) increased 0.3%, to close at 26,062.68. The S&P 500 increased 0.5% to close at 2,886.73. The tech-laden Nasdaq Composite Index closed at 7,823.17, gaining 1.1%. The fear-gauge CBOE Volatility Index (VIX) decreased 4.3% to close at 15.60. Advancers outnumbered decliners on the NYSE by a 1.95-to-1 ratio. On Nasdaq, a 2.31-to-1 ratio favored advancing issues.
How Did the Benchmarks Perform?
The Dow rose 78.7 points to close in the green. Gains for the 30-stock index were broad based and was supported by a rally in the shares of 3M MMM and Apple AAPL, which gained 1% and 1.3%, respectively. The Dow closed in the green for the sixth consecutive session, its longest streak of gains since May 2018.
While 3M carries a Zacks Rank #4 (Sell), Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 29.6 points to end in positive territory. Of the 11 major sectors of the S&P 500, eight ended in green, with consumer discretionary and technology stocks leading the advancers. The Consumer Discretionary Select Sector SPDR Fund (XLY) and Technology Select Sector SPDR Fund (XLK) increased 0.9% and 1%, respectively on Monday.
Meanwhile, the Nasdaq increased 81.1 points to close in the green. Shares of Amazon AMZN rallied 3.1% and supported gains for the Nasdaq.
Tariffs on Mexico Suspended “Indefinitely”
After reaching an agreement with Mexico over preventing illegal immigration from the country into the United States, President Donald Trump tweeted late on Friday that he was suspending his plans to impose tariffs on Mexico “indefinitely”. He also stated that Mexico had agreed to take strict measures to stop such immigration and work toward stemming the “tide of Migration through Mexico, and to our Southern Border.”
Further, the U.S. State Department also released a U.S.-Mexico Joint Declaration which stated that a program would be established by the United States to return asylum seekers back to Mexico who cross over to America from the southern border.
However, on Sunday, Trump warned Mexico in a series of tweets. He said that if for any “unknown reason” the agreement fails, the United States would have to go ahead with the imposition of tariffs on Mexico.
Trump’s Warning to China
Trump is due to meet with China’s Xi Jinping ta G-20 Summit later in this month. The meeting would be the first after both the countries imposed tariffs on each other in a major escalation of the ongoing trade war.
However, Trump stated on Monday that if Xi decided to skip the meeting, additional tariffs on China will be imposed immediately. Last week, Trump had also stated that if a trade deal with China is not reached soon, he would impose another round of tariffs on Chinese goods worth $300 billion.
Further, speaking to CNBC on Jun 10, Trump also stressed on the fact that China would make trade deal with America because “they’re going to have to.”
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