Wall Street’s main indexes have closed higher after a choppy session as investors grew more optimistic on trade after reports that the US is considering a delay in imposing tariffs on Mexican imports.
The market added to gains on Thursday after a Bloomberg report cited unidentified sources saying that President Donald Trump could delay the tariffs he had threatened to put on Mexican goods as soon as Monday.
The Washington Post reported that under a possible immigration deal, Mexico would deploy 6000 troops to the Guatemalan border.
But strategists urged caution until a final US-Mexico deal is reached and followed by a US-China trade deal.
“You have to take all of this with a huge grain of salt,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in St. Louis, adding that even if the Mexico report is true, “it would be a short-term positive.”
“It’s not giving that long-term clarity businesses and investors and consumers need to make decisions,” he said.
Earlier in the day Trump said he would decide on more tariffs “probably right after the G20” meeting later this month, which followed his warning overnight that he would levy duties on at least another $US300 billion ($A430 billion) worth of Chinese goods.
The Dow Jones Industrial Average rose 181.09 points, or 0.71 per cent, to 25,720.66, the S&P 500 gained 17.34 points, or 0.61 per cent, to 2,843.49 and the Nasdaq Composite added 40.08 points, or 0.53 per cent, to 7,615.55.
It was the first time since mid-May that the three major indexes gained ground for three sessions in a row.
The energy sector, which was the hardest-hit last month by heightening trade tensions, rose 1.7 per cent as crude prices made some gains late in the day, making it the biggest percentage gainer of the S&P’s 11 major sectors.
The trade-sensitive industrial sector regained some ground late in the session and ended the day up 0.01 per cent after falling as much as 0.86 per cent earlier.
While investors are hopeful that the US Federal Reserve could be open to cutting interest rates if needed, they were cautious before the US jobs report due on Friday morning after private data was weaker than expected on Wednesday.
Federal Reserve policymakers have hinted they would be ready to cut rates if the US-China trade spat threatens a decade-long expansion. Since early May, Trump has slapped tariffs on Chinese imports and warned of US levies on Mexico.
“People are positioning for weaker jobs data. If there’s not a trade deal by the end of June and payrolls weaken, you could see the Fed consider a cut by the July meeting,” said Wells Fargo’s Samana.
Earlier in the day, the European Central Bank also underscored the threat to global economic expansion from the trade disputes by trimming the region’s growth forecasts for the next two years.
Advancing issues outnumbered declining ones on the NYSE by a 1.50-to-1 ratio; on Nasdaq, a 1.27-to-1 ratio favoured decliners.
The S&P 500 posted 84 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 64 new highs and 154 new lows.
On US exchanges 6.72 billion shares changed hands, compared with the 7.12 billion average for the last 20 sessions.