US open: Stocks record early gains, Navarro's comments taken 'wildly out of context'

(Sharecast News) - Wall Street stocks opened higher on Tuesday following some volatile trading overnight as comments regarding the US-China phase one trade deal were taken "wildly out of context".
As of 1540 BST, the Dow Jones Industrial Average was 0.78% higher at 26,228.67, while the S&P too was 0.85% stronger at 3,144.45 and the Nasdaq Composite started out the session 1.00% firmer at 10,157.23.

The Dow Jones opened 203.71 points higher on Tuesday and the Nasdaq cracked the 10,000 barrier, adding to the gains recorded during the previous session even as investors digested data showing an accelerating number of new Covid-19 infections in several US states.

Stocks were in the green at the bell on Tuesday, having recovered from losses recorded overnight after White House trade advisor, Peter Navarro, sent shockwaves through the market when he seemed to indicated the US-Sino trade deal was over.

In an interview with Fox News, Navarro was asked: "Do you think that the president sort of [...] I mean, he obviously really wanted to hang onto this trade deal as much as possible. And he wanted them to make good on the promises because there had been progress made on that trade deal, but given everything that's happened and all the things you just listed, is that over?"

Navarro responded: "It's over. Yes."

Given that relations between Washington and Beijing have been more than strained of late, concerns had grown that the hard-fought phase one trade deal might very well be under pressure.

However, Navarro later stated his remarks had been taken "wildly out of context" and that he was referring to trust between the White House and the Chinese Communist Party after it lied about "the origins of the China virus" and "foisted a pandemic upon the world".

Donald Trump also took to Twitter to reassure Americans that it remained in place, tweeting: "The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!"

In terms of Covid-19 headlines, Texas governor Greg Abbott said on Monday that the coronavirus was spreading at an "unacceptable rate" across the state, while White House economic advisor Larry Kudlow asserted that there was "no second wave coming" and that lawmakers would likely approve another stimulus package by the end of July.

On the macro front, business activity contracted for a fifth straight month in June, according to IHS Markit, although the rate of decline eased, potentially indicating that the coronavirus-fuelled recession may be drawing to an end.

IHS Markit's flash US Composite Output Index rose to a reading of 46.8 last month from 37.0 a month earlier as businesses reopened after shuttering in the middle of March.

Oanda's Edward Moya said: "Risk appetite is in the driver seat after global PMI data showed the economic comeback is well underway and mostly topping expectations.

"US investors got the best reading possible, PMI data strongly rebounded, but didn't outperform like Europe, calming any thoughts that maybe fiscal and monetary authorities may not keep the [stimulus] floodgates open."

Elsewhere, home-selling activity in the States rebounded last month, albeit from a depressed base.

According to the US Department of Commerce, in seasonally adjusted terms, the annualised rate of new home sales jumped at a month-on-month pace of 16.6% to reach 676,000. Economists had forecast 630,000.

May's gain was also from a downwardly revised 580,000 clip for April, versus the originally reported 623,000 print.