The Dow Jones has strengthened, closing up nearly 0.78% as it continues recovering from concerns tied to a U.S.-China trade agreement. Investor sentiment remains positive, even after Moody's downgraded the U.S. credit rating due to fiscal concerns. Initial selling pressure subsided as investors adjusted to risks, prompting a rally, particularly in cyclical sectors. A proposed tax cut plan may further boost market sentiment, although geopolitical tensions and trade negotiations continue to create uncertainty. The ongoing negotiation between the U.S. and China remains closely monitored amid these developments.
The selling pressure quickly eased as investors believed that prior market reactions had already priced in much of the risk, leading to increased buying interest.
Attention this week is turning to the tax cut proposal backed by former President Trump, which could boost market sentiment through income tax reductions.
Despite the downgrade of the U.S. credit rating by Moody's, investor sentiment remains upbeat as hopes for a trade truce continue to support markets.
Geopolitical risks are still a concern, especially following the failed peace talks and continued tension between the U.S. and Russia.
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