Microsoft [NASDAQ: MSFT] climbed more than 7.57% Monday US time — their largest one day percentage gain since October 2015.
The US stock market as a whole seems to be recovering from last week’s steep declines. Opening strong for the week, the S&P 500 gained 2.7%, the Dow Jones 2.8%, and NASDAQ 3.3%.
ABC reported it was the biggest one day increase in 2.5 years for each of the three major US indexes.
Why the Microsoft share price rise?
Microsoft’s rapid increase was due to a combination of reasons. Including investment bank Morgan Stanley believing that, as a result of cloud adoption, the tech company could reach a market cap of $1 trillion by next year.
As well as fears of a trade war subsiding. Experts are saying that Trump’s unorthodox approach has resulted in China willing to negotiate.
Larry Lindsey, who served as a top economic advisor to Former President George W Bush, told CNBC.com:
‘Trump is trying something new. We won’t know until it’s tried whether it’s going to work or not…The Chinese response so far suggests that they’re more willing to negotiate then they have in the past.’
What’s next for Microsoft and the US stock market?
There are myriad reasons why Microsoft and US stocks fell in the first place, including Facebook’s privacy reports and Trump’s tariff threats.
In particular, the danger of a trade war had investors running — even the Australian stock market felt the heat. Though news that China and the US are willing to negotiate seems to have settled the market for now.
Lindsey told CNBC that he thinks the market is overreacting to all of the trade talk, stating:
‘What’s happening in monetary policy is going to be far, far more important to the market than these little hiccups we have in trade.’
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