Investing.com – The Dow racked up gains on Monday, but ended the day well below session highs as industrials stocks rallied after President Donald Trump pushed backed a planned hike in tariffs on Chinese imports, citing progress in recent talks.
The Dow Jones Industrial Average rose 0.23%, or 60 points after rising as much as 209 points at session highs. The S&P 500 added 0.12%, while the Nasdaq Composite gained 0.36%.
President Trump said the United States and China are "very, very close" to sealing a trade agreement. The positive remarks on trade came a day after the president had delayed raising tariffs on Chinese imports, set for Friday, citing "productive" trade talks.
With the threat of an escalation in the U.S.-China trade dispute on the wane, trade-sensitive Boeing (NYSE:BA) and Caterpillar (NYSE:CAT) pushed industrials higher.
Still, the current 10% levy the United States has imposed on Chinese imports are expected to remain in place as an "enforcement mechanism" until China meets certain commitments like technology transfer, or intellectual property theft.
"While it is possible some tariffs could be removed more quickly as part of such a deal, we expect that some tariffs imposed last year to remain in place as an enforcement mechanism until certain commitments have been met," Goldman Sachs said in a note.
Industrial were also boosted by a surge in General Electric (NYSE:GE) after the conglomerate sold its biopharma to Danaher Corp (NYSE:DHR) for $21.4 billion. But some said the deal does little to alleviate the company's main problem concerning its power business.
In energy, stocks were pressured by a fall in prices after President Trump lashed out at OPEC, calling on the oil cartel to "relax" on prices.
Semiconductor companies, many of which have exposure to China, also saw gains on the positive trade news, ending the day up 0.8%. The Philadelphia Semiconductor Index has gained more 8% over the past month.