The Dow Jones Industrial Average opened 304.42 points or 1.18% higher on Monday morning following optimism revolving around trade talks and a global stimulus.
On Friday, Apple (NASDAQ: AAPL) Chief Executive Officer Tim Cook warned U.S. President Donald Trump that the additionally tariffs could hurt the Company’s operations and give its rivals such as Samsung a competitive advantage.
To note, the tariffs between the U.S. and China significantly impact companies within the technology industry such as semiconductor manufacturers. Specifically, it would hurt companies that deal business within the U.S. and China.
Trump noted on Sunday that Cook made a “good case” regarding the tariffs and how Samsung wasn’t paying any tariffs. As a result, Trump decided to reconsider the potential tariffs.
Despite optimism regarding possible trade talks, Trump also made it clear that he still does not want to do business with Chinese tech giant, Huawei. Trump’s decision followed weekend reports that the administration was looking to extend a reprieve that allows Huawei to buy parts from U.S. companies.
“I don’t want to do business at all because it is a national security threat,” Trump told reporters. “We’ll see what happens. I’m making a decision tomorrow [Monday].”
The Commerce Department previously put Huawei on a blacklist in May, which barred U.S. companies from doing business with Huawei, unless they were granted a special license from the government.
Furthermore, markets were also driven by Trump’s downplay on a potential recession. On Sunday, Trump provided an upbeat outlook for the economy saying that he doesn’t believe there is a recession happening.
“I don’t think we’re having a recession,” Trump told reporters. “We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money.”
Markets were rattled last week after the 10-year U.S Treasury note fell below that of the 2-year U.S., which is commonly seen as a recession indicator. The inverted yield curve led investors to believe that the economy will either slow down or contract within the near future.
White House trade adviser Peter Navarro noted that he was certain that the U.S. will have a strong economy through 2020, largely due to stimulus from major economies. Navarro also mentioned that the Federal Reserve would be lowering rates as part of a global stimulus push.