Stocks rose slightly on Monday as investors looked ahead to a key meeting between President Donald Trump and Chinese President Xi Jinping at this week’s upcoming G-20 summit.
The Dow Jones Industrial Average climbed 32 points at the open, buoyed by United Technologies. The S&P 500 advanced 0.1% as the utilities and consumer staples sectors outperformed. The Nasdaq Composite traded 0.2% higher.
Dow member United Technologies rose 1% after an analyst at Cowen upgraded the stock to outperform from market perform. Deere shares, meanwhile, climbed 0.7% after being upgraded to buy from neutral at UBS.
Trump and Xi are expected to discuss the ongoing trade war between the U.S. and China at the summit, which is set to start Friday. Investors are hopeful the two leaders will get closer to a deal that will end the conflict. China and the U.S. have slapped tariffs on billions of dollars worth of their goods over the past year. Last month, the two countries hiked tariffs targeting some goods.
“Financial markets welcomed the announcement that a full-blown standalone US-China ‘bilateral’ meeting would be held in the margins of the annual G20 Summit,” said Christopher Granville, managing director of global political research at TS Lombard, in a note. “That was an understandable relief reaction.”
“Judging by the more conciliatory tone from both Washington and Beijing last week, the likely optics of the Trump-Xi talks will resemble the previous G20 meeting in Buenos Aires last December,” he said. “Back then, the leaders’ friendly rapport
supplied the impetus to launch a new series of negotiations, with an agreement to refrain from further tariff hikes or other punitive action for the following three months while the talks proceeded. ”
Trade optimism, coupled with the increasing likelihood of easier monetary policy from the Federal Reserve, sparked a massive rally this month. The major indexes came into Monday’s session up more than 7% each in June. Those gains erased a massive sell-off in May, which was fueled by China and the U.S. hiking tariffs on each other’s products.
The S&P 500 hit a record on Friday, reaching a high of 2,964.15.
In corporate news, Caesars Entertainment shares surged 14% after the casino operator agreed to be bought out by Eldorado Resorts for more than $17 billion, including debt.