Global Trade Optimism Boosts Markets

Global Financial Markets Rally as Some Hopeful on Tariff Negotiations

Global financial markets rallied yesterday, with stocks and bonds rising sharply, as investors breathed a sigh of relief that the United States and China may be making progress in their trade negotiations.

The Dow Jones Industrial Average surged 2.1 percent, while the S&P 500 gained 2.3 percent. The yield on the benchmark 10-year Treasury note rose to its highest level in nearly two weeks, a sign that investors are becoming more optimistic about the economy.

The rally came after President Trump said that he and Chinese President Xi Jinping had a "very good" phone call, and that they were making progress on a trade deal. Trump also said that he was considering a delay in the planned increase in tariffs on Chinese goods, which is set to take effect on March 2.

Investors took these comments as a sign that the two countries may be able to reach a deal, which could help to ease trade tensions and boost the global economy.

"The fact that the two leaders are talking and that there's some progress being made is a positive sign," said Michael Antonelli, market strategist at Robert W. Baird & Co. "It's not a guarantee that a deal will get done, but it's a step in the right direction."

The rally in financial markets was broad-based, with stocks in every sector rising. The technology-heavy Nasdaq composite index gained 3.1 percent, while the Russell 2000 index of small-cap stocks rose 2.5 percent.

The gains in financial markets came despite a report from the Commerce Department that showed the U.S. economy grew at a sluggish 2.2 percent annual rate in the fourth quarter. The report also showed that the economy grew at a 2.9 percent rate in the third quarter.

The report was seen as a mixed bag, with some economists saying that it could be a sign that the economy is gaining momentum, while others said that it was a sign of continued sluggishness.

Despite the mixed report, investors were focused on the positive developments in trade negotiations, and the potential for a deal to be reached.

"The market is looking for any positive sign that a deal can be reached, and the fact that the two leaders are talking is a big one," said Peter Cardillo, chief market economist at Spartan Capital Securities. "It's a sign that there's a willingness to work together, and that's a big step forward."