NEW YORK: Stocks around the world extended recent gains and oil prices jumped on Wednesday on optimism that the United States and China may be inching towards a trade deal, soothing fears of an all-out trade war and its possible impact on global growth.
Optimism regarding a trade deal boosted US Treasury yields to their highest this year, while the US dollar extended its losses after minutes from a Dec. 18-19 Federal Reserve policy meeting showed that many Fed policymakers said the central bank could be patient on future rate hikes.
Delegations from China and the US ended talks in Beijing on Wednesday amid signs of progress on issues including purchases of US farm and energy commodities and increased access to China's markets.
China has pledged to purchase "a substantial amount" of agricultural, energy and manufactured goods and services from the United States, the US Trade Representative's office said on Wednesday.
MSCI's all-country index climbed 1.14 percent for a fourth day of gains.
That added to advances since last week in equity markets around the world, following a strong US employment report and comments from the Federal Reserve chief that calmed worries that US interest rate hikes would hurt growth.
A range of Federal Reserve policymakers said last month they could be patient about future interest rate increases and a few did not support the central bank's rate increase that month, minutes from their Dec. 18-19 policy meeting showed.
On Wednesday, a clutch of US Federal Reserve officials said they would be cautious about any further increases in interest rates so that the central bank could assess growing risks to an otherwise-solid US economic outlook.
The US stock market was supported by advances by technology and other trade-sensitive sectors. The benchmark S&P 500 index is up by about 10 percent from 20-month lows hit around Christmas.
"If you want to gauge how investors are viewing the trade talks, just watch tech, and semiconductors in particular," said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.
The Dow Jones Industrial Average rose 169 points, or 0.71 percent, to 23,956.45, the S&P 500 gained 17.27 points, or 0.67 percent, to 2,591.68 and the Nasdaq Composite added 76.86 points, or 1.11 percent, to 6,973.86.
The pan-European STOXX 600 benchmark closed up 0.53 percent, its highest close in nearly four weeks.
Optimism that the trade standoff would be resolved also lifted oil prices.
US West Texas Intermediate (WTI) crude oil futures were at $52.32 per barrel, up $2.54, or 5.1 percent, the first time this year that WTI has topped $50. International Brent crude futures were up $2.71, or 4.62 percent, at $61.43 per barrel.
The dollar sank to its lowest since October, with gains led by the euro and sterling, as risk appetite improved and investors reduced their safe-haven bets.
"As long as you don't see a situation where there is a negative turn much like what we saw over the last quarter, markets will probably view any trade development, even if they're not concluded by the March 1 deadline, with modest optimism just because it reduces the downside risk to the outlook," said Mazen Issa, senior FX strategist, at TD Securities in New York.
Improved risk appetite sent US Treasury yields to their highest this year, ahead of the sale of new 10-year supply by the Treasury Department.
Benchmark 10-year notes were last down 3/32 in price to yield 2.7261 percent after earlier rising to 2.747 percent, the highest since Dec. 28.
Gold prices rose on Wednesday, with spot gold rising 0.49 percent to $1,291.2 per ounce.
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