Dow Crosses 26,000: Is the US-China Trade Deal Enough to Revitalize the Market?

Throughout the past five days, amidst reports about the Federal Reserve’s reluctance towards raising the interest rate, the Dow Jones has breached the 26,000-point mark for the first time since March 1. The Dow suffered early last week due to the steep sell-off of the Boeing stock, which is estimated to have cost the Dow more than 300 points but it briefly broke out of 26,000 points on March 19, showing signs of a potential short-term rally.

While the Dow has slightly dropped to 25,887 points, on Tuesday, the WSJ reported that the negotiators of the U.S. and China scheduled meetings with the intent of establishing a comprehensive trade deal by the end of April. The new development in the U.S.-China trade talks and the Fed’s patience on a rate hike could revitalize the confidence of investors in the U.S. market. Since December 2018, within less than four months, the Dow has demonstrated an impressive recovery from 21,792 points to 25,887 points, recording an 18.79 percent growth in a relatively short time frame.

The Dow and the U.S. stock market have been stagnant in the past month and some analysts have attributed the lack of activity in the U.S. market to the rapid rise in the value of stocks and the lack of appetite of retail investors to invest in the market as a result. Fundamental factors have remained strong in the U.S. market throughout March with consumer confidence, wages, and productivity growth rising noticeably in recent months.

Dow Crosses 26,000: Is the US-China Trade Deal Enough to Revitalize the Market?, CCN, Mar 20