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Markets deliver strong performance after US grants Huawei temporary reprieve
| 05/22/2019
- Markets end higher on a wide front after US grants Huawei temporary reprieve
- Dow Jones up 197.43 points, Nasdaq Composite up 1.1%, S&P 500 rises 0.9%
- Huawei suppliers in particular note benefits
US stock markets ended higher yesterday after news that the country has temporarily eased restrictions on Huawei.
A strong performance from Intel helped the Dow Jones Industrial Average climb 197.43 points to close at 25,877.33. The Nasdaq Composite ended 1.1% higher at 7,785.72, while the S&P 500 was boosted by a 1.2% increase in tech shares to end 0.9% higher at 2,864.36.
Markets also benefited from a 1.7% rise in Boeing stocks.
The U.S. Commerce Department announced on Monday night that Huawei will be allowed to buy American-made products to continue delivering software updates and maintain existing networks until August 19.
The stocks of Huawei suppliers such as Xilinx (+4.6%) and Micron Technologies (+3%) benefited from the news. Qualcomm stocks also ended 1.5% up, while Lam Research and Nvidia gained 1.8% and 2.2% respectively.
In China, share prices also strengthened on a wide front. The Shanghai Composite ended 1.2% higher, and the Shenzhen A Shares index closed 1.8% up. In Europe, the Stoxx 600 gained 0.5%.
Despite these improvements, the Dow Jones and S&P 500 are still down well over 2% since the beginning of May, and the Nasdaq has lost 3.8%.
According to Pence Wealth Management Chief Investment Officer Dryden Pence, the market will stay in a narrow range until the trade conflict has been resolved, at which point stock prices should start to increase.
He added: “It’s hard for the market to go a lot higher until we get some resolution on trade. But it’s hard for the market to go a lot lower because the fundamentals are there.”