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(Bloomberg) — Stocks rose as China revived hopes of progress in trade talks with the Trump administration this week despite potential headwinds. Treasuries slipped.
Chipmakers led the S&P 500 Index higher after Bloomberg reported that China is still open to a partial trade deal with the U.S. The Index advanced for the third day in four. Ten-year Treasury yields approached 1.6%. The Turkish currency and its stocks dropped after the country began a military offensive in Syria against Kurdish militants.
While volume was subdued during the Yom Kippur holiday, equities traders seemed to get a boost of confidence before high-level U.S.-China trade talks are set to resume in Washington on Thursday. While a broad agreement seems unlikely, China signaled it’s open to a limited deal, provided no more tariffs are imposed, according to an official. In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.
“It’s encouraging to hear China say that they want to make some sort of small deal,” said Randy Frederick, a vice president of trading and derivatives who helps oversee $3.7 trillion in assets at Charles Schwab (NYSE:). “If we can get the two sides to agree to not raise tariffs any further than where they are, that would be positive.”
Investors are also looking to gauge the next moves by major central banks. Chairman Jerome Powell said Tuesday that the Federal Reserve will resume purchases of Treasury securities to avoid a repeat of recent turmoil in money markets, while hinting at the possibility of another rate cut. Minutes of the Fed’s most recent rates meeting will be released Wednesday, providing further insight into policy makers’ thinking ahead of their next meeting at the end of the month.
Elsewhere, the iShares MSCI Turkey ETF headed for its worst three-day performance since March as the lira weakened to a four-month low. Benchmark equity gauges fell across Asia, except for those in Shanghai and Mumbai. Bond yields dropped in Greece after the region’s most-indebted country sold bills at negative yields. Gold held above $1,500 an ounce.
The yuan climbed offshore and headed to its biggest gain in almost a month, helped by trade optimism and a stronger-than-expected daily fixing. West Texas crude touched $53 a barrel.
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