U.S. stocks rallied Wednesday, erasing earlier losses, after President Trump and European officials met in Washington for trade talks.
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The Dow Jones Industrial Average jumped 172.16 points, or 0.68%, to 25,414.10. The S&P 500 gained 25.67 points to close at 2,846.07. The Nasdaq Composite was up 91.47 points at 7,932.24.
Trump welcomed Jean-Claude Juncker and Cecilia Malmstrom at the White House on Wednesday afternoon to discuss tariffs between the U.S. and European Union. In an unexpected announcement after the meeting, Trump announced that the U.S. and EU agreed to work toward zero tariffs and zero subsidies on non-auto industrial goods and avoid any new tariffs while talks are ongoing. Trump had threatened to slap tariffs on European car imports.
The EU also agreed to buy more U.S. soybeans, while the U.S. will work toward resolving tariffs recently imposed on European steel and aluminum.
“The catalyst to unleashing a higher multiple could be the removal of the trade war fears, but today is just the first step,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “Going forward, negotiations with Mexico and Canada will be very important, and the 800 pound gorilla in the room is China, which also serves as the Trump administration’s most difficult challenge.”
Earlier Wednesday, Trump said he “hopes to work out a fair and reciprocal trade deal between the U.S. and Europe." Junker told reporters as he sat down with Trump that Europe and the United States were allies and “needed to work together.”
Also ahead of the meeting, Larry Kudlow, a top economic adviser to President Trump, was upbeat that both sides could come to a decision that avoids a trade war.
“They have a positive attitude going into this. Our team has a positive attitude,” Kudlow said on Fox News’ “Fox & Friends” Wednesday morning. He also called the meeting “absolutely crucial.”
Trump has threated up to a 25% tariff on European cars and parts and the EU said it would retaliate by slapping tariffs on $20 billion worth of U.S. goods.
Wednesday is a busy day for corporate earnings reports. Results have already been released by companies including Boeing, General Motors, Coca-Cola and UPS. Facebook will report its latest quarterly results after the closing bell.
|I:DJI||DOW JONES AVERAGES||26536.82||-11.40||-0.04%|
|I:COMP||NASDAQ COMPOSITE INDEX||7909.971271||+25.25||+0.32%|
Boeing’s shares took a big hit even after the company’s second-quarter results surpassed expectations. While the overall results were positive, commercial airplane sales missed estimates while the company cautioned higher costs in its defense business would cut into its full-year margins.
|GM||GENERAL MOTORS COMPANY||38.13||+0.45||+1.19%|
General Motors' stock was also week after the company cut its profit outlook for the year, citing higher steel and aluminum costs. The lowered outlook came as the company reported second-quarter earnings that surpassed analysts' expectations. Revenue came in just above estimates.
U.S. stocks finished mostly higher Tuesday as a stream of overall, positive earnings reports overshadowed geopolitical tensions, but the Nasdaq fell into negative territory after the tech-heavy composite index set a record high Tuesday morning.
Commodities were mostly higher.
FOX Business’ Ken Martin contributed to this article.