WASHINGTON (dpa-AFX) - Stocks have shown a significant move to the upside in morning trading on Monday, extending the rally seen last week. With the continued advance, the Dow and the S&P 500 have reached their best intraday levels in a month.
Currently, the major averages are hovering firmly in positive territory. The Dow is up 164.49 points or 0.6 percent at 26,148.43, the Nasdaq is up 113.80 points or 1.5 percent at 7,855.90 and the S&P 500 is up 22.36 points or 0.8 percent at 2,895.70.
Continued buying interest has been generated in reaction to news the U.S. and Mexico have reached an agreement to avert President Donald Trump's threatened tariffs on all Mexican imports.
Trump revealed in a post on Twitter late Friday that the 5 percent tariff he threatened to impose on Mexican imports beginning today has been 'indefinitely suspended.'
The suspension of the tariff threat comes as the two countries signed a deal Trump claims will help stop the flow of migrants through Mexico and into the U.S.
'I am pleased to inform you that The United States of America has reached a signed agreement with Mexico. The Tariffs scheduled to be implemented by the U.S. on Monday, against Mexico, are hereby indefinitely suspended,' Trump tweeted.
He added, 'Mexico, in turn, has agreed to take strong measures to stem the tide of Migration through Mexico, and to our Southern Border. This is being done to greatly reduce, or eliminate, Illegal Immigration coming from Mexico and into the United States.'
Details of the deal announced by the State Department indicated Mexico will take unprecedented steps to increase enforcement to curb irregular migration, including deploying 6,000 troops from its newly formed National Guard to its southern border.
However, some analysts have questioned the impact of the steps being taken by Mexico, arguing Trump threatened to derail a key economic partnership for a deal that ultimately maintains the status quo.
Trump also warned on Twitter this morning that the tariffs will be reinstated if Mexico's legislative body does not approve an unrevealed but 'very important' part of the deal.
Semiconductor stocks have shown a substantial move to the upside in morning trading, resulting in a 2.9 percent spike by the Philadelphia Semiconductor Index.
Banking, transportation, and retail stocks are also seeing considerable strength, while gold stocks are bucking the uptrend amid a steep drop by the price of the precious metal.
In overseas trading, stock markets across the Asia-Pacific region moved notably higher during trading on Monday. Japan's Nikkei 225 Index surged up by 1.2 percent, while Hong Kong's Hang Seng Index soared by 2.3 percent.
The major European markets have also moved to the upside on the day, although the German markets are closed for a holiday. While the U.K.'s FTSE 100 Index has advanced by 0.5 percent, the French CAC 40 Index has risen by 0.3 percent.
In the bond market, treasuries are pulling back following the upward move seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 4.9 basis points at 2.133 percent.
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