The ceasefire between the United States and China has set off a celebration on Wall Street.
The Nasdaq and the S&P 500 climbed more than 0.5% apiece.
„A truce is definitely better than an escalation of hostilities,“ Kit Juckes, strategist at Societe Generale, wrote to clients on Monday.
Juckes said that even though investors may doubt the substance of the US-China agreement, „this morning’s response reflects relief and a desire to pick up some last-ditch bargains.“
Not surprisingly, investors piled back into companies that rely on China for a significant chunk of their sales. That includes tech giants like Apple ( AAPL), Nvidia ( NVDA) and Qualcomm ( QCOM) as well as industrial companies like Boeing ( BA), Caterpillar ( CAT) and Deere ( DE). Tiffany ( TIF) jumped 4%, while Wynn Resorts ( WYNN) surged 9%.
„The market is thrilled to get a little bit of a reprieve,“ said Amanda Agati, co-chief investment strategist at PNC. „But it’s early to say anything is done and to cross this worry off the list. There’s still a long road ahead.
The relief rally comes after the S&P 500 spiked nearly 5% last week, its best since December 2011. That rebound was triggered by hopes of progress on the trade front and a speech by Federal Reserve chief Jerome Powell that investors interpreted as a signal the central bank will not rush to raise interest rates.
