The influence of trade war and Brexit on the global stocks

The stock markets in U.S. Asia, as well as in other parts of the world, reacted to the news that the U.S. and China agreed on a partial deal. However, it does not mean that the trade war is over. The good news is that two economic powers realized the importance of this deal. The prolonged trade between the largest economies in the world created additional problems for the global economy.

According to the International Monetary Fund (IMF), global growth in 2019 will fall to the lowest level since the 2008-2009 financial crisis. The IMF made this announcement on October 15. The organization underlined the major problem which is the trade war.

U.S. and European stocks on Tuesday

The trade talks more precisely; the good news about this trade dispute had a positive impact on the global stocks. However, this was not the only reason as another positive news connected to Brexit also helped to alleviate the risks.

There is a chance that the European Union and the U.K. may reach a deal before the next summit. It is important to mention that the leaders’ summit will take place this week.

The major stock indexes in the U.S. strengthened their positions on October 15. The Dow Jones Industrial Average increased by 237.44 points or 0.89% and reached 27,024.8. Another major index, which is the S&P 500 rose by 29.53 points or 1% to 2,965.68. The Nasdaq Composite added 100.06 points or 1.24% to 8,148.71.

The S&P 500, as well as the Nasdaq Composite, reached the highest closing level in more than three weeks.

The pan-European STOXX 600 index gained 1.1%. Moreover, other major European stock indexes also increased on Tuesday. Germany’s DAX and French CAC 40 rose by a similar amount.

Another interesting information regarding the stock markets is that two British Banks also gained from the news about the Brexit. The shares of Lloyds and Royal Bank of Scotland gained between 4% and 5%.

The stock markets in the U.K. and around the world are vulnerable to trade disputes and the possibility of no-deal Brexit. However, the leaders of the EU and the U.K. should work together to alleviate the risk of no-deal Brexit.