top of page

Nasdaq hits 8,000 for the first time as US and Mexico move closer to striking NAFTA deal

Stocks jumped on Monday as the United States and Mexico drew closer to a deal on NAFTA. Investors also digested reassuring comments from Federal Reserve Chair Jerome Powell on the central bank's policy-tightening path.

The Nasdaq Composite climbed 0.6 percent to an all-time high, breaking above 8,000 for the first time, as Facebook, Amazon, Netflix and Alphabet. The Dow Jones Industrial Average rose 214 points as Caterpillar outperformed.

The S&P 500 gained 0.6 percent to hit a record high with materials and financials as the best-performing sectors.

"The market has been buffeted with a lot of headwinds lately, and the biggest one is trade," said Art Hogan, chief market strategist at B. Riley FBR. "If you were to take trade out of the picture, you would have a smoother ride higher in this market."

CNBC reported, citing a Mexican official, that trade talks between the U.S. and Canada had concluded and a NAFTA announcement could come later on Monday.

The comment comes after Mexican Economy Minister Ildefonso Guajardo said Sunday both countries were close to resolving key differences on trade. This would pave the way for a new deal between the two longtime trade partners.

"We've continued making progress," Guajardo said.

President Donald Trump later tweeted that a deal with Mexico was "looking good."

Shares of Caterpillar and Boeing rose 2.5 percent and 1.3 percent, respectively. Their stocks are considered trade bellwethers because of their large exposure to overseas markets. Shares of Ford, General Motors and Fiat Chrysler also rose.

The Mexican peso rose 1.2 percent against the dollar.

Investors have been grappling with trade worries over the past few months as the U.S. takes a more protectionist stance on the matter. The U.S. has slapped tariffs on billions of dollars worth in Mexican and Chinese imports, to which Mexico and China have retaliated.

Global markets were also buoyed by news from Friday that the Fed's Powell sees "further, gradual" rate hikes ahead. The Fed chief said at the Jackson Hole Symposium in Wyoming that the central bank would likely continue with its policy tightening if the economy continued to strengthen.

Powell's comments lifted the S&P 500 and Nasdaq composite indexes to record highs in Friday's trading session. In Europe, the Stoxx 600 index rose 0.4 percent on Monday, while the German Dax climbed 0.8 percent.

In Asia, China's central bank, the People's Bank of China (PBOC), reintroduced a policy adjustment aimed at supporting the yuan. The move, coupled with Powell's comments, sent the Shanghai Composite up by 1.9 percent overnight.

Tesla shares dropped more than 2 percent after CEO Elon Musk gave up efforts to take the company private.

Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page