Stocks jumped on Monday as the United States and Mexico closed a new trade deal, potentially removing a source of uncertainty that had been plaguing investors for months.It turns out other countries are willing to strike fairer trade deals with the US if the President is willing to push for them.
The S&P 500 gained 0.8 percent to close at 2,896.74 — a record high — with materials and financials as the best-performing sectors. The Nasdaq Composite climbed 0.9 percent to an all-time high, breaking above 8,000 points for the first time, as Facebook, Amazon, Netflix and Alphabet rose. Tech's gains led the Nasdaq to close at 8,017.90.
The Dow Jones Industrial Average rose 259.29 points to 26,049.64 as Caterpillar outperformed. Monday also marked the first time since Feb. 1 that the Dow closed above 26,000.
President Donald Trump said the deal would be called The United States-Mexico Trade agreement, leaving behind the 24-year-old NAFTA name. "The name NAFTA has a bad connotation because the United States was hurt very badly by NAFTA," he said. Trump added that the deal with Mexico is also very helpful for farmers and manufacturers. U.S. Trade Representative Robert Lighthizer said the deal must be approved by Congress before being implemented.And Canada? Canada is likely to agree to a NAFTA deal with the US this week, business council says
The comment comes after Mexican Economy Minister Ildefonso Guajardo said Sunday both countries were close to resolving key differences on trade. This would pave the way for a new deal between the two longtime trade partners. "We've continued making progress," Guajardo said.
Canada will restart official talks with the United States on Tuesday in the hope that an updated version of the North American Free Trade Agreement (NAFTA) will be signed off in the coming days.
Canadian Foreign Minister Chrystia Freeland is in Washington to continue negotiations, following the news that Mexico and the U.S. have already reached an agreement that rewrites the trilateral trade pact, first ratified in 1994.
That agreement has been hailed by President Donald Trump as "a big day for trade," sending U.S. stocks to fresh all-time highs Monday, with Asian equities also propelling higher Tuesday.
Maryscott Greenwood, CEO of the Canadian American Business Council (CABC), told CNBC on Tuesday that she thought Canada would join the arrangement and could even finalize a new NAFTA deal this week.
"There is only a handful of tough issues left. Mexico is already there. I think we can get there this week, I really do," she said, before cautioning that this week's trilateral talks would be "harsh" and "intensive."