Wall Street looks set for its fourth day of gains amid renewed hopes for trade as Donald Trump opened to the door to extending a truce on the US-China trade war.

The S&P 500 rose 0.3 per cent in mid afternoon trading on Wednesday, with nearly all sectors in green except for utilities, which was down 0.7 per cent. Energy led the gains with a 0.9 per cent increase, followed by financials and industrials — which were both up by 0.5 per cent.

The Dow Jones Industrial Average and the tech-heavy Nasdaq Composite also each gained 0.3 per cent.

US stocks were given a boost after Mr Trump on Tuesday said he is considering extending the deadline for trade talks with China beyond March 1, the original deadline to arrive at a deal or trigger an escalation of tariffs on $200bn of Chinese imports to 25 per cent from 10 per cent.

Mr Trump made these comments as senior US officials — including trade representative Robert Lighthizer and Treasury secretary Steven Mnuchin — were scheduled to hold a new round of talks with their Chinese counterparts in Beijing this week.

Risk sentiment this week has also been bolstered by a tentative agreement struck between Democrats and Republicans late Monday to keep the US government open and avoid a repeat of the previous shutdown that went on for 35 days, the longest in the US history. That helped Wall Street chalk up its biggest rally in a month on Tuesday. However, on Wednesday, the White House said the president has still not decided whether to back a bipartisan congressional budget deal that he must sign before Friday in order to avoid a government shutdown.

On the corporate front, Activision Blizzard led the S&P 500 with shares up 6.9 per cent, after the video game maker on Tuesday said it will cut about 8 per cent of its workforce and boost investments in its biggest games.

Johnson & Johnson splashed out $3.4bn on robotic platform Auris Health as the world’s largest healthcare group tries to speed up its move into digital surgery. J&J shares were up 0.3 per cent, while those of Auris were flat after initially jumping on the news. Happily benefiting from the news of the deal was Auris Medical Holding, which bears a name strikingly similar name to J&J’s acquisition target, and which saw shares jump as much as 30 per cent before giving up the bulk of those gains to trade 6 per cent higher.

Investors also digested economic data, which showed US consumer prices held steady in January — likely supporting the Federal Reserve’s patient approach as it weighs future rate rises.

Elsewhere in the markets, the yield on the benchmark 10-year bond was slightly up by 0.9 basis points to 2.7 per cent. Meanwhile the dollar index, which tracks the greenback against a weighted basket of global peers, was barely changed at 96.98.

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