The Dow Is Rising Because Markets Are Betting on a Trade War Truce

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6:39 a.m. The Dow Jones Industrial Average looks set for a higher open as investors look ahead to the meeting between U.S. President Donald Trump and Chinese President Xi Jinping at the G-20 gathering on Saturday.

Dow futures have gained 82 points, or 0.3%, while S&P 500 futures have risen 0.2%, and Nasdaq Composite futures have advanced 0.1%.

No one is expecting the U.S. and China to reach a deal tomorrow—that would be too much to ask. But expectations are rising that Trump and Xi will find a way to keep the trade war from escalating, primarily by keeping the next layer of tariffs from being implemented. And given the market’s unwillingness to suffer a big decline, we’d assume that investors fell like that’s a realistic goal.

“Investors are holding their breath as the G-20 meeting starts in Osaka today,” writes London Capital Group’s Ipek Ozkardeskaya. “Although the chances of seeing a trade deal by the end of this weekend remain low, investors will be chasing any progress that could hint at an eventual resolution for the year-old trade dispute.”

Maybe they’ll chase the market too.

Write to Ben Levisohn at