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Trade Talks, Semiconductors Outlook Help Fuel Risk-On Sentiment in U.S. Stock ETFs

This article was originally published on ETFTrends.com.

U.S. markets and stock exchange traded funds pushed higher Wednesday on rising optimism over a trade deal with Beijing, along with support from the technology sector as bullish calls lifted semiconductors to record highs.

On Wednesday, the Invesco QQQ Trust (QQQ) rose 0.6%, SPDR Dow Jones Industrial Average ETF (DIA) added 0.1% and  SPDR S&P 500 ETF (SPY) was up 0.2%.

Fueling the risk-on sentiment, Advanced Micro Devices surged and was the biggest winner in the S&P 500 after Nomura Instinet covered both AMD and Intel with "buy" ratings, Reuters reports.

Chipmakers, which are heavily tied to China for their revenue, also strengthened this year on optimism over trade and recovering demand for chips.

The benchmark Philadelphia Semiconductor index also jumped as much as 3% to a record high on Wednesday.

“Tech and semis are a huge part of what China does and what the U.S. consumes,” Michael Antonelli, market strategist at Robert W. Baird, told Reuters. “The price action in this sector (semiconductors) will be viewed as a positive going forward.”

Trade Talk Optimism a Catalyst

Optimism over trade talks also bolstered sentiment as White House economic adviser Larry Kudlow was upbeat about the trade talks, adding that Beijing and Washington hope to get closer to a deal this week.

“The fact that a trade deal is probably at hand is helping lift markets,” Peter Cardillo, chief market economist at Spartan Capital Securities, told Reuters.

The Financial Times reported the U.S. and China resolved most of the sticking points preventing an agreement to end their months-long tariff row, according to the Wall Street Journal.

“We are clearly getting to a point where there is going to be a conclusion of those talks,” Seema Shah, senior global investment strategist at Principal Global Investors, told the Wall Street Journal. “It is fair for the market to expect some kind of resolution.”

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