NEW YORK (Reuters) - World stock markets rallied on Thursday, with the Dow and S&P 500 setting new highs, while the U.S. dollar slipped as investors viewed this week’s fresh U.S. and Chinese tariffs on imports as less harsh than initially feared.
Still, investors remained cautious about the next steps in the U.S.-China trade dispute, driving long-dated U.S. Treasury yields lower. But the equity market’s early take on the latest moves was that they were mostly benign for the U.S. economy.
Larry Fink, chief executive of BlackRock Inc, the world’s largest asset manager, said the United States was “a big winner” in the trade spat with China “in the short term,” though not necessarily over time.
The greenback fell amid a drop in safe-haven demand for the currency and a resurgence in global risk appetite on relief the new round of tariffs was less harsh than feared.
The Dow industrials became the last key U.S. stock index to regain record territory, while the benchmark S&P 500 set a fresh record high. The Dow and tech-heavy Nasdaq closed almost 1 percent higher, as many European indexes did too.
“Our general view on the trade issue is that thus far it has not been economically significant,” Mona Mahajan, U.S. investment strategist at Allianz Global Investors in New York.
Some market participants hope China comes to the table and negotiates a deal, Mahajan said, referring to the bullish sentiment that lifted the week’s rally in equities.
“The other reasoning behind this could also be the
