Dow Jones Industrial Average rises by 150 points as US eases Huawei restrictions

Wall Street set to open higher on Huawei reprieve
May 21, 2019
WSJ Interview
May 21, 2019

Dow Jones Industrial Average rises by 150 points as US eases Huawei restrictions

THE Dow Jones Industrial Average shot up by 150 points today as technology stocks rebounded from news of the US temporarily easing trade restrictions imposed on Huawei.

The Dow Jones was up by 155 points to 25,835.23, or 0.60 percent, shortly after the US stock market open at 2.40pm BST. By 3.29pm BST, the Dow was up 127.28 points to 25,807.18. It had closed down 84.1 points to 25679.9 during the last trading session. Meanwhile, the S&P 500 opened higher by 13.79 points, inching up 0.49 percent to 2,854.02, and the Nasdaq Composite gained 63.19 points, or 0.82 percent, to 7,765.57.

Chipmakers, which bore the brunt of Monday’s sell-off, rose in early trading with Micron Technology, Qualcomm and Xilinx all enjoying a boost in share price.

The positive performance from the market today follows an announcement from the US Commerce Department stating restrictions on Huawei would be temporarily backed off.

Just last week, the Chinese phone manufacturer was placed on an export blacklist of companies deemed to be engaging in activities contrary to the national security of the US.

The temporary relief on this will last 90 days before being reviewed and will allow Huawei to purchase American-made goods.

This would be in order to maintain existing networks and provide software updates to existing Huawei handsets.

The company is still prohibited from buying US parts and components to manufacture new products without approval.

Connor Campbell, analyst at Spreadex, said: “The easing up on Huawei is being seen as a sign that while the United States and China are unhappy with each other.

“Neither side wants to burn the negotiation bridge at the moment.”

Wall Street has been impacted by mounting concerns about a prolonged trade war, with the S&P 500 set to post its worst monthly decline since the December sell-off.

The benchmark index is trading nearly 4 percent below its all-time high hit earlier in May.

Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said: “This is pure case of cautiousness and we’re stuck in a trading range.

“The recent behavior is of indecisiveness.”