Futures on the Dow Jones Industrial Average (DJIA) are flying high Thursday thanks to the favorable trade war-related developments between the U.S. and China. Beijing and Washington have reportedly agreed to remove the trade tariffs in a phased manner. This follows two weeks of negotiations between the two nations, which has brought them closer to a “phase one” trade agreement.
It is not surprising to see the market celebrate this development. The U.S.-China trade war has caused a great deal of pain to the economies of both countries, adding uncertainty to the macroeconomic environment.
But it remains to be seen if the Dow and the stock market can ride this piece of good news for a long time as questions are already being raised about the two countries putting pen to paper on a trade deal.
Before we see material evidence of an agreement, any trade headline will be seen as a short-term trading opportunity. We see good news coming out, and the market is reacting to that. I don’t know if it will last for a long time.
Dow spikes and the stock market gets ready to celebrate
Dow futures are up 135 points, or 0.49 percent, this morning at 8 am ET, pointing toward a strong day for the stock market ahead. S&P futures and Nasdaq Composite futures are also up by 0.37 percent and 0.43 percent, respectively.
Dow Jones Industrial Average futures are up significantly, but the danger remains. | Source: Yahoo! Finance
Is it too early to celebrate?
There’s no denying the fact that the positive developments on a potential U.S.-China trade deal will be great news for the stock market and the Dow.