Stock indexes rise on optimism of recovery, shrink back

Marco Green
May 29, 2020

The Trump administration is crafting a range of options, including targeted sanctions, new tariffs and further restrictions on Chinese companies, according to US officials and people familiar with the discussions.

The S&P 500 is up 74.28 points, or 2.5%.

The announcement came a day after China's legislature endorsed a national security law for Hong Kong that has strained relations with the USA and prompted new protests. The bill will bypass Hong Kong's legislature, raising concerns over the longevity of Hong Kong's "one party, two systems" principle, which allows additional freedoms mainland China does not have.

If the US response "involves broad sanctions against individuals or entities, that would be a larger issue and not something the [market] could easily dismiss", said Vital Knowledge's Adam Crisafulli.

The Department of Labor is scheduled to release the latest update to initial jobless claims at 8:30 a.m. ET Thursday morning. The previous week's level was revised higher to 2.446 million.

Robert Gibbs, former White House Press Secretary, tweeted: "Some good news though: Continuing claims fell for the first time during the pandemic to 21.1 million, meaning some are being hired [and] going back to work".

Revised government data showed the USA economy shrank at an annualized 5% rate in the first quarter instead of 4.8%.

"I would prefer that the market not go up quite as fast because the sharper it moves higher, the more vulnerable it becomes to a pullback", said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

The Dow Jones Industrial Average rose 303.52 points, or 1.21 percent, at the open to 25,298.63. The Dow is on track for its best week since April.

While earlier in the day there was optimism related to reopening the economy and positive economic data, there is still uncertainty as to how consumers will react, and how the market will recover.

"The greatest stimulus for the economy is a safe reopening", wrote Gregory Faranello, head of USA rates trading at AmeriVet Securities. "In the end, reopening in and of itself will gradually show improvement although the true demand-side still remains unclear".

Other reports by Click Lancashire

Discuss This Article