Stocks rally as US-China trade war is put 'on hold'

Stocks surged Monday after trade tensions between Washington and Beijing cooled, and even as the Trump administration clashed with Iran on its nuclear program and sanctions relief. The dollar hit a fresh five-month high, and the 10-year Treasury yield held comfortably above 3%.

Here's the scoreboard:

Dow Jones Industrial Average: 25,011.95 +296.86 (+1.20%)

S&P 500: 2,729.90 +16.93 (+0.62%)

AUD/USD: 0.7577 0.0055 (+0.73%)

ASX 200 SPI futures: 6,082.5 +10.5 (+0.17%)

1. US Secretary of State Mike Pompeo hit Iran with a list of demands for sanctions relief. The proposal would require Tehran to halt all uranium enrichment and to stop supporting militant groups in the Middle East.
2. A US-China trade war is "on hold," according to the Trump administration. After a week of meetings in Washington, Beijing agreed to significantly reduce the US-China trade deficit. But some remain skeptical about how the deal will hold up.
3. The dollar rallied to a five-month high. Cooling trade tensions raise expectations for faster US growth and a more aggressive Federal Reserve.
4. US Steel shares fell nearly 5% after hefty tariffs on the metal were suspended. President Donald Trump earlier this year announced a 25% tax on Chinese steel imports to the US and 10% on aluminum.
5. Oil prices bounced around, but settled close to recent multi-year highs. Markets are poising for a further production decline in Venezuela, which could be exposed to fresh US sanctions after holding an election widely seen as illegitimate.

Here is the upcoming economic calendar:

• Australia releases data on construction work done.
• The UK holds inflation report hearings.

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