Global stocks rise and oil gains after Biden's phone call to Xi Jinping lifts hopes for trade relations

President Joe Biden, and Chinese President Xi Jinping. PAUL J. RICHARDS/AFP via Getty Images
Global stocks rose Friday after a call between Joe Biden Xi Jingping raised hopes for trade between the top economies.

Leaders from the US and China discussed how their countries can ensure that competition does not veer into conflict.

US stocks are expected to recover from losses while oil prices recovered from Thursday's sell-off.

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Global stock prices rose Friday after President Joe Biden met with Chinese leader Xi Jinping for the first time in seven months. This was a sign of a growing relationship between two of the most important economies in the world, and a hopeful sign for global trade.

Dow Jones futures rose 0.4%, while the S&P 500 (tech-heavy Nasdaq) gained 0.3% at 5:55 AM. ET suggests that stocks in the US will rise if trading begins later in the morning.

After the release of data on jobless claims, which stoked fears about global growth, and the Federal Reserve's slowing down stimulus, Thursday saw the US stock markets close lower.

According to a White House transcript, Biden and Xi spoke out about "the responsibility of each nation to ensure that competition doesn't veer into conflicts."

According to reports, the talks were respectful and helped drive gains in Asian equities at the end of the week. The Shanghai Composite gained 0.2% and Hong Kong's Hang Seng rose 1.8%. Tokyo's Nikkei climbed 1.2%.

Jeffrey Halley, Oanda's senior market analyst, said that relief in Asia should be enough to encourage New York stocks to open higher and should also provide momentum for oil prices.

Halley stated in a Friday note that "the Biden/Xi telephone call has had the exact same effect on oil market as other asset classes with any hope of US/China relations being construed positively for global trade, and basically almost all assets."

Oil prices recovered from Thursday's selloff. This was after China announced that it would release some crude oil reserves to lower raw material prices for producers. Brent crude oil gained 1.7% to $72.73 per barrel. West Texas Intermediate rose 1.7%, to $69.33 per barrel.

The FTSE 100 in London was up 0.2% despite July data showing that the UK economy had barely grown. The rise in COVID-19 cases, as well as supply-chain problems, kept GDP at 0.1%. This is compared to 0.6% expected and a gain of 1% in June.

European equities also followed Asia higher with the Euro Stoxx 50 increasing 0.4% and Frankfurt's DAX rising 0.2%. The announcement by the European Central Bank on Thursday, that it would moderately slow down the pace of pandemic-related asset purchases was not enough to shake the markets.

The US producer price inflation report for August will be Friday's main data highlight. It is due at 8.30 am. ET.

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