U.S. stocks advanced on Monday at the onset of a heavy earnings week, while European shares inched higher as investors took heart from potential progress in U.S.-China trade talks and increasing geopolitical tensions sent oil prices higher.
Tech pulled Wall Street into the black as investors girded themselves for second-quarter results from major industrial and technology companies and looked forward to the U.S. Federal Reserve’s expected interest rate cut at the end of the month.
The South China Morning Post reported U.S. trade negotiators will likely visit China next week for their first face-to-face talk with Chinese officials since the G20 meeting, when Trump held off imposing a new round of tariffs on Chinese imports.
“The thing to watch with Chinese negotiations is not necessarily the day to day events,” said Bucky Hellwig, senior vice president at BB&T Wealth Management in Birmingham, Alabama.
“We’re still a long way from hammering out an agreement,” Hellwig added. “We’ve seen this happen before.”
The Dow Jones Industrial Average rose 18.38 points, or 0.07 per cent, to 27,172.58, the S&P 500 gained 8.4 points, or 0.28 per cent, to 2,985.01 and the Nasdaq Composite added 57.65 points, or 0.71 per cent, to 8,204.14.
Canada’s main stock index rose on Monday, as energy stocks gained on the back of higher oil prices.
The Toronto Stock Exchange’s S&P/TSX Composite index was up 32.94 points, or 0.2 per cent, at 16,518.88.
Eight of the index’s 11 major sectors were higher.
The energy sector climbed 0.5 per cent per cent as oil prices rose on concerns that Iran’s seizure of a British tanker last week may lead to supply disruptions in the energy-rich Gulf.
The materials sector, which includes precious and base metal miners and fertilizer companies, added 0.3 per cent as gold prices held steady.
Health care stocks dropped 0.8 per cent as marijuana producers declined. Hexo Corp. and Aphria Inc. dipped 3.4 per cent and 3.3 per cent, respectively.
Growing tensions in the Middle East, coupled with worries about Britain leaving the European Union (Brexit) without a deal held world stocks flat.
“Brexit fears can be somewhat alleviated by a friendly European Central Bank, and it appears that’s the way they’re trending,” Hellwig said.
The pan-European STOXX 600 index rose 0.13 per cent and MSCI’s gauge of stocks across the globe gained 0.06 per cent.
Brent crude prices moved higher on worries that Iran’s seizure of a British tanker last week could result in supply disruptions.
U.S. crude rose 1.15 per cent to $56.40 per barrel and Brent was last at $63.49, up 1.63 per cent on the day.
The dollar and euro were little changed as traders looked to policy decisions from the U.S. Federal Reserve and the European Central Bank regarding the pace at which they will cut interest rates, beginning with the ECB on Thursday.
“If the ECB is more aggressive in easing than the Fed, that could lead to strengthening in the dollar,” Hellwig added.
The dollar index rose 0.07 per cent, with the euro down 0.05 per cent to $1.1214.
U.S. Treasury yields fell and the yield curve flattened as dovish Fed bank policy supported demand for government debt.
Benchmark 10-year notes last rose 4/32 in price to yield 2.036 per cent, from 2.05 per cent late on Friday.
The 30-year bond last rose 11/32 in price to yield 2.5625 per cent, from 2.578 per cent late on Friday.
Gold held steady, having slid 1 per cent in the previous session on lowered rate cut expectations, but the safe-haven metal still found support in the form of global geopolitical uncertainties.
Spot gold UP 0.08 per cent at $1,426.01 an ounce.
Shipping prices rose on strong vessel demand, with the Baltic Dry Index jumping to a 5-year high.