US stocks close higher amid hopes for US-China trade deal

By Mucahithan Avcioglu

ISTANBUL (AA) - US stocks closed higher Wednesday on hopes that a trade war between China and the US may be avoided as tones softened between the two countries.

The S&P 500 jumped 1.67%, or 88.1 points, to close at 5,375.86.

The Nasdaq Composite rose 2.5%, or 407.63 points, to finish at 16,708.05 and the Dow climbed 1.07%, or 419.59 points, to 39,606.57.

The rally was a reaction to optimism that the US-China tariff dispute would be resolved. US President Donald Trump said Tuesday that final tariffs on Chinese imports “won’t be anywhere near as high as 145%,” adding that they “won’t be 0%."

Trump said Wednesday that a prospective deal with China to recalibrate the trade relationship will be "fair" as the world's top two economies continue to be locked in a simmering trade war.

"We are going to have a fair deal with China. It's going to be fair," Trump said at the White House, claiming the relationship with China "got out of control" under his predecessors.

The comments continue the president's upbeat streak after saying Tuesday that negotiators would be "very nice" with Beijing.

Meanwhile, China said Wednesday that if the US wants to resolve tariff tensions through negotiations, it must stop "threatening" and "coercing" Beijing.

It should ”engage in talks with China based on equality, mutual respect, and reciprocity,” Chinese Foreign Ministry spokesperson Guo Jiakun told reporters in Beijing, according to the Global Times.

In the Fed's Beige Book report released Wednesday, it was noted that the outlook has deteriorated markedly in some districts due to increased economic uncertainty, especially regarding tariffs.

On the macroeconomic data side, new home sales in the US surged 7.4% month-on-month in March to 724,000, above forecasts.

The S&P's flash estimate Purchasing Managers' Index (PMI) rose to 50.7 points in April, up 0.5 points from March's 50.2, also above estimates.

The VIX Index, also known as the “fear index," dropped 6.93% to 28.45 -- its lowest since April 2, the day of Trump's "reciprocal" tariffs announcement.​​​​​​​