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Stock markets on both sides of the Atlantic climbed to all-time highs yesterday amid hopes of a US-China trade deal and an interest rate cut by the Fed. The FTSE 100 edged up 0.1 per cent, or 8.2 points, to 9,653.82 – but that was enough to build on last week’s record levels to scale a fresh peak. And in New York, the Dow Jones, S&P 500 and Nasdaq indices all hit highs – despite recent fears that American tech stocks are heading for a bubble. The moves were mirrored in Europe, while the biggest rallies were seen in Asia, where Japan’s Nikkei leapt 2.5 per cent and South Korea’s Kospi by 2.6 per cent. But there was a reversal for gold and silver, which have both recently been at all-time peaks. The precious metals tend to be seen as a store of value in troubled times but have lost much of their lustre in recent days. Gold yesterday dipped below $4,000 an ounce having peaked at nearly $4,400 just a week ago, while silver slipped close to $46 having topped $54 earlier this month. It came after Chinese and US economic officials hammered out a deal for presidents Donald Trump and Xi Jinping to mull over at a meeting in South Korea, set for Thursday. Trump said ‘we feel good’ about working out an agreement. The potential for a rapprochement between the world’s largest economies comes after the US President threatened to reignite their trade feud. Trump had stepped back from the brink earlier this year – in the face of market turmoil – after threatening huge tariffs on Beijing. The dispute erupted again recently when China’s decision to impose export controls on rare earths – raw materials used in advanced technologies such as eco cars – prompted him to threaten an extra 100 per cent levy on Chinese imports. A trade deal would allay fears of the two sides pressing ahead with either measure. Markets saw it as enough to sustain the astonishing rally for US stocks since April’s tariff turmoil. Since that low point, the S&P 500 has surged by more than 37 per cent. The rally has been driven by exuberance over the prospects for artificial intelligence (AI) and key AI stocks such as Nvidia. And hopes of another interest rate cut by the US Federal Reserve – when rate-setters meet this week – have added to the buoyant mood. Melissa Brown, managing director of investment decision research at SimCorp, said: ‘Markets just want to be positive. ‘Investors want a reason to buy and they see that reason in whether it’s lower rates, trade deals, decent earnings or the continued dominance of the AI trade.’ Traders are also this week looking ahead to a flurry of quarterly results from five of the ‘Magnificent Seven’ tech stocks – with Microsoft, Alphabet, Apple, Amazon and Meta all set to report. Nvidia and Tesla are the other two members of this group. In London, which lacks the kind of tech heavyweights that dominate Wall Street, the mood was a mix of optimistic and cautious. The FTSE was also hit by the fall in silver and gold prices, which dragged on precious metal miners such as Fresnillo and Endeavour Mining, each down by 5 per cent. Chris Beauchamp, chief market analyst at investing and trading platform IG, said: ‘The selling continues to snowball in gold and silver, barely two weeks after the price reached a record high.’
