US stocks climb as stimulus hopes outweigh fresh China tensions
- US stocks climbed on Monday as investors focused on deliberations on a new stimulus bill and looked through escalating China tensions.
- Congressional leaders and Trump administration officials met over the weekend to continue ironing out a fiscal relief measure. Negotiations about expanded unemployment benefit remain at a standstill since the $600-per-week boost expired on Friday.
- Fears of a soured US-China relationship resurfaced after Secretary of State Mike Pompeo said on Sunday that the White House might take action against Chinese software companies "in the coming days."
- Tech giants drove indexes' gains, with Microsoft leading the pack after confirming its talks about buying TikTok.
- Watch major indexes update live here.
Stocks gained on the first trading day in August as investors looked through revived US-China tensions and stayed hopes for a near-term stimulus bill.
Lawmakers and White House officials met through the weekend to deliberate on another round of fiscal relief. Expanded unemployment benefits expired at the end of July, erasing a key support measure for millions of jobless Americans. While Republicans and Democrats reached agreements on some facets, including direct payments, they remain in a standoff on unemployment aid.
Meanwhile, new risks to the already fragile US-China relationship surfaced over the weekend. US Secretary of State Mike Pompeo said on Sunday that the White House might take action against Chinese software companies "in the coming days" following reports that the administration would ban TikTok. The statement reinvigorated trade fears just weeks after the two countries sparred over their respective consulates.
Here's where US indexes stood shortly after the 9:30 a.m. ET market open on Monday:
- S&P 500: 3,285.65, up 0.4%
- Dow Jones industrial average: 26,534.96, up 0.4% (107 points)
- Nasdaq composite: 10,859.99, up 1.1%
Tech giants led benchmark indexes higher after crushing earnings on Thursday afternoon. Apple, Alphabet, and Amazon all traded higher in the morning. Microsoft leaped after confirming reports that it's in talks to buy TikTok. The Trump administration gave the company 45 days to ink a deal before TikTok's US operations could be banned.
ADT surged on Monday after announcing a $450 million investment from Google. The stake backs a "mutual, long-term commitment to partnership," ADT said in a press release. Google took a 6.6% ownership stake in ADT through the deal.
Equity futures edged higher in early trading after the pharmaceutical giant Eli Lilly said it started a phase-three study of its coronavirus antibody drug in nursing homes.
Oil reversed early losses to trade higher. West Texas Intermediate crude rose as much as 0.7%, to $40.54 per barrel. Brent crude, oil's international standard, climbed 1.2%, to $43.80 per barrel, at intraday highs.
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