US stocks open higher, tax cut hopes offset trade worries

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Major US equity indices bounced after last week’s drop and kicked off a new week on a positive note, shrugging off continued US-China trade tensions.

On Friday, the US President Donald Trump threatened to impose duties on a further $267 billion, over and above planned tariffs on $200 billion of Chinese imports and resurfaced fears of a full-blown trade war between the world’s two largest economies. 

The negative factor, however, was largely negated by optimism over a fresh round of tax cuts, dubbed “Tax Reform 2.0”, which is intended to augment Trump’s 2017 tax overhaul that added $1.5 trillion to the federal deficit through permanent tax cuts for US companies.

However, anxiety over escalating US-China trade tensions might continue to dominate markets and keep a lid on any runaway rally, at least for the time being.

Nevertheless, during the opening hour of trade, the Dow Jones Industrial Average advanced around 95-points to move back above the 26K mark. Meanwhile, the broader S&P 500 Index added nearly 13-points to 2,885 and tech-heavy Nasdaq Composite Index gained over 17-points to 7,920.

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