US stocks have closed higher after an announced delay of planned tariffs on some Chinese imports brought buyers back to the equities market in a broad-based rally. Tech stocks, headed up by Apple, led all three major US indexes into the black following the announcement, which calmed fears over the US-China trade war and growing signs of imminent recession. Apple, a likely beneficiary of the tariff delay, rose 4.2 per cent on Nasdaq on Tuesday, while the Philadelphia SE Semiconductor Index gained 3 per cent.
In economic news, US consumer prices accelerated in July, with core CPI, which strips out volatile food and energy prices, growing at 2.2 per cent year-on-year, its largest gain in six months and well above the US Federal Reserve’s two per cent target. The healthy inflation reading is unlikely to change market expectations for another interest rate cut from the Fed next month as it grapples with the US-China trade war and its economic fallout.
The spread between two-year and 10-year US Treasuries hit its flattest level in 12 years, reflecting anxieties over trade and geopolitical turmoil. But yields rose across the board on news of the tariff delay. The Dow Jones Industrial Average rose 372.54 points, or 1.44 per cent, to 26,279.91, the S&P 500 gained 42.48 points, or 1.47 per cent, to 2926.23 and the Nasdaq Composite added 152.95 points, or 1.95 per cent, to 8016.36. All of the 11 major sectors in the S&P 500 closed in the black, with technology and consumer discretionary seeing the biggest percentage gains.Morning-Market-Note-Wednesday-14th-August