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Stocks rise to record highs ahead of Trump trade speech

CNBC logo CNBC 1 min ago Fred Imbert

Stocks advanced Tuesday as investors awaited a speech from President Donald Trump on trade and economic policy.

The Dow was up 30 points, while the S&P 500 rose 0.3% to a new intraday high. The Nasdaq also climbed to a record, trading 0.45% higher.

Semiconductor stocks such as Marvell Technology and Micron Technology advanced 3.6% and 2.3%, respectively. The VanEck Vectors Semiconductor ETF (SMH) gained 0.6%.

Rockwell Automation shares surged more than 19% after the company posted quarterly results that beat expectations along with stronger-than-forecast guidance. However, Advance Auto Parts slid around 8% on disappointing same-store sales for the previous quarter.

Trump is scheduled to speak at noon ET at the Economic Club of New York where he could give clues to the status of trade talks between the U.S. and China. His speech comes amid questions regarding plans to sign a trade deal in the coming weeks.

On Friday, Trump said he had not agreed to scrap tariffs on Chinese goods after reports earlier last week said both sides had agreed to cancel existing tariffs in tranches. Last month, Trump said China and the U.S. agreed to a phase one trade deal to be signed later in November, raising expectations of a deal being made.

Recent optimism around U.S.-China trade helped stocks reach record highs. The Dow and S&P 500 are both up more than 3% over the past month while the Nasdaq has risen 5.4% in that time.

“What makes prospects for the latest putative pact look brighter this time around is the narrower scope of the negotiations,” Eleanor Olcott, a China policy analyst at TS Lombard, said in a note. “By phasing the talks and leaving thornier issues for later, a temporary plaster can be put on the increasingly fractured relationship.”

The Dow eked out a record close on Monday as Boeing shares jumped, but the S&P 500 snapped a three-day winning streak.

Lori Calvasina, the head of U.S. equity strategy at RBC Capital Markets, thinks a lot of the positive news around a phase one deal have been baked in.

“The stocks most exposed to the China trade war are back to prior peaks – and pre-trade war/1Q18 levels – in terms of both performance and valuation,” Calvasina said in a note. “With [earnings] reporting season winding down, a positive outcome on a China trade deal baked in, 2020 forecasts still in need of downward adjustment, and companies making it clear that 2020 guidance isn’t going to come anytime soon, positive catalysts between now and year-end are difficult to imagine.”

CNBC’s Silvia Amaro contributed to this report.

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