U.S. stocks took a breather at the open on Tuesday heading into the Christmas break amid improving U.S.-China trade relations and lingering optimism about the health of the domestic economy.
The Dow Jones Industrial Average rose just 21.04 points, or 0.07 per cent, at the open to 28,572.57.
The S&P 500 opened higher by 1.44 points, or 0.04 per cent, at 3,225.45, while the Nasdaq Composite gained 9.36 points, or 0.10 per cent, to 8,955.01 at the opening bell.
All three major stock indexes closed at all-time highs on Monday, continuing a record-setting spree. President Donald Trump further fanned hopes of a trade truce over the weekend by saying the two sides would sign a Phase 1 deal “very shortly.”
Investors were wary at the beginning of the month about the stock market mirroring a slump from December 2018, when trade tensions between the world’s top two economies escalated, marking the worst December on Wall Street since the Great Depression.
But the much-awaited breakthrough in negotiations, coupled with indications of a smoother exit for Britain from the European Union, has sent financial markets across the world into record territory this month.
“This holiday period should be rather calm as trade updates appear very constructive as we near the finalization of the Phase 1 trade deal next month,” Edward Moya, senior market analyst at OANDA, wrote in a note.
The S&P 500 is up nearly 29 per cent so far in 2019 and set for its best year since 2013, also powered by three interest rate cuts by the Federal Reserve and easing fears of a recession.
Volumes are expected to be thin this week as traders settle in for the holidays, with the main U.S. stock exchanges to close at 1 p.m. ET on Tuesday and remain shut on Christmas Day.