U.S. Stocks Rally on Optimism For a U.S.-China Trade War Thaw

Stocks closed broadly higher on Wall Street Monday as investors found reason to be cautiously optimistic again about the potential for progress in the costly trade war between the U.S. and China.

The gains reversed some of the major stock indexes’ hefty losses from last Friday, when jitters over the latest escalation in the trade dispute roiled the market, contributing to its fourth straight weekly loss.

Monday’s rally got its start early after President Donald Trump said his negotiators had received encouraging calls from China on Sunday, though China’s foreign ministry denied knowledge of any such calls.

Big technology companies, which do a lot of business in China and have much riding on the outcome of the trade dispute, accounted for a big share of the gains. Apple climbed 1.9% and Microsoft added 1.5%.

The S&P 500 rose 31.27 points, or 1.1%, to 2,878.38. The Dow Jones Industrial Average gained 269.93 points, or 1.1%, to 25,898.83. The Nasdaq, which is heavily weighted with technology stocks, rose 101.97 points, or 1.3%, to 7,853.74.

The Russell 2000 index of smaller companies picked up 16.52 points, or 1.1%, to 1,476.

The major indexes are each on track for losses of 3% or more in August in what has been a volatile month for the market as investors try to gauge whether trade conflicts and slowing economies around the world will drag the U.S. into a recession.

The new round of tariff threats caused a sell-off on Friday that erased more than 600 points from the Dow. Global markets appeared headed for another wave of selling early Monday, when indexes in China closed sharply lower, until Mr. Trump said his trade negotiators had received two “very good calls” from China on Sunday.

During a press conference in France after the G7 meeting, the president said “China wants to make a deal, and if we can, we will make a deal.”

Mr. Trump expressed his optimism about China hours after he sent mixed messages on the tariff war. He at first seemed to express regret Sunday over escalating the trade dispute, but the White House later said his only regret was that he didn’t impose even higher tariffs on China.

The White House announced weeks ago that China’s negotiating team was expected in Washington in September to continue the discussions.

Communications services and health care stocks also contributed to Monday’s gains. Dish Network climbed 3.9% and Bristol-Myers Squibb rose 3.3%.

Bond prices fell, which sent the yield on the 10-year Treasury up to 1.54% from 1.52% late Friday. Higher yields push up interest rates on mortgages and other consumer loans, which helped drive bank shares higher. Bank of America gained 1.2%.

Major indexes in Germany and France closed higher. Markets in Britain were closed for a national holiday.

Benchmark crude oil fell 53 cents to settle at $53.64 a barrel. Brent crude oil, the international standard, fell 64 cents to close at $58.70 a barrel. Wholesale gasoline fell 2 cents to $1.62 per gallon. Heating oil declined 3 cents to $1.79 per gallon. Natural gas rose 8 cents to $2.23 per 1,000 cubic feet.

Gold fell 30 cents to $1,526.30 per ounce, silver rose 22 cents to $17.62 per ounce and copper rose 1 cent to $2.54 per pound.

The dollar rose to 106.19 Japanese yen from 105.31 yen on Friday. The euro weakened to $1.1098 from $1.1145.