Please ensure Javascript is enabled for purposes of website accessibility
US Stocks Climb Amid Signs of a Thaw in US-China Trade War
gvw_ap_news
By Associated Press
Published 6 years ago on
August 26, 2019

Share

Stocks marched broadly higher on Wall Street in midday trading Monday after President Donald Trump claimed China was willing to reopen talks on the costly trade war that has roiled markets and dimmed the outlook for global economic growth.

“It always seems that Trump, after he does something to freak the market out or escalate this trade war, he tries to dial it back to some degree. As an investor, you just have to know there’s a lot of uncertainty and there is no clarity in the short term right now.” — Brad Bernstein, senior portfolio manager at UBS Wealth Management USA
Uncertainty remained high, however, about the next developments in the trade dispute, which has repeatedly seen the sides attempt to negotiate before ending in acrimony and more tariffs and trade penalties.
Big technology companies, which do a lot of business in China and have much riding on the outcome of the trade dispute, rose the most. Apple climbed 1.7%.
Health care and communications services stocks also contributed to the gains as the market clawed back some of its heavy losses from last week, which marked its fourth straight weekly loss. On Friday, the Dow Jones Industrial Average plunged more than 600 points after Washington and Beijing threatened a new round of tariffs on each other’s goods.
The escalation in the trade conflict had global markets headed for another sell-off until Trump said his trade negotiators had received two “very good calls” from China on Sunday. China’s foreign ministry replied, however, that it didn’t know what Trump was talking about.
“It always seems that Trump, after he does something to freak the market out or escalate this trade war, he tries to dial it back to some degree,” said Brad Bernstein, senior portfolio manager at UBS Wealth Management USA. “As an investor, you just have to know there’s a lot of uncertainty and there is no clarity in the short term right now.”

Stock Markets Have Been Volatile This Summer

The S&P 500 was up 0.8% as of 12:05 p.m. Eastern Time. The Dow gained 210 points, or 0.8%, to 25,845. The Nasdaq rose 0.9%.
Major indexes in Germany and France rose. Markets in Britain were closed for a national holiday. In Asia, Hong Kong’s Hang Seng and Japan’s benchmark Nikkei 225 closed lower.
Bond prices were little changed. The yield on the 10-year Treasury held steady at 1.52%. Oil prices edged lower.
Energy services company TechnipFMC led the gainers in the S&P 500, climbing 5.2%. Gap fell the most, sliding 2.8%.
Stock markets have been volatile this summer as traders have been whipsawed by the turns in the trade war between the world’s biggest economies.
The conflict escalated once again on Friday, after China announced new tariffs on $75 billion in U.S. goods. Trump responded angrily on Twitter, at one point saying he “hereby ordered” U.S. companies with operations in China to consider moving them to other countries, including the U.S.
Trump also later announced that the U.S. would increase existing tariffs on $250 billion in Chinese goods to 30% from 25%, and that new tariffs on another $300 billion of imports would be 15% instead of 10%.
Stephen Innes, managing partner at Valour Markets in Singapore, compared the difficulty of assessing the volatile market situation to reading tea leaves.

China Allowed Its Currency, the Yuan, to Fall Further on Monday

“Nobody understands where the president is coming from,” he said, adding that the best thing Trump can do for market stability is to “keep quiet.”
The market is now dominated by fears of a portending U.S. recession, although the American economy is actually holding up, and much of the U.S. economy is made up of consumption, Innes said. If interest rates come down, he added, consumer spending is likely to go up, working as a buffer for the economy.

“There’s no doubt that this current escalation increases the risk for our economy and the global economy. Despite all this we still believe we won’t have a recession next year.”Brad Bernstein
Some analysts think the Federal Reserve will lower interest rates again this year. Fed Chairman Jerome Powell indicated last week that the central bank was prepared to cut interest rates but gave no clear signal on when or by how much, while suggesting that uncertainty over Trump’s trade wars have complicated the central bank’s ability to set interest rate policy.
A quarter-point rate cut in September is considered all but certain. Some think the Fed will cut rates again in December.
Meanwhile, China allowed its currency, the yuan, to fall further on Monday. That effectively helps its exporters, negating some of the effects of higher U.S. tariffs.
The yuan declined to 7.1468 to the dollar, a relatively modest change from Friday’s low point of 7.0927 but its weakest rate since January 2008. The yuan has lost 6.5% from this year’s high on Feb. 28.
Economists say that the unpredictability of the trade dispute is at least as damaging as the tariffs themselves, affecting the decisions of central banks and companies as they plan investments.
“There’s no doubt that this current escalation increases the risk for our economy and the global economy,” Bernstein said. “Despite all this we still believe we won’t have a recession next year.”

DON'T MISS

What Are Fresno Real Estate Experts Predicting for 2025 and Beyond?

DON'T MISS

First California EV Mandates Hit Automakers This Year. Most Are Not Even Close

DON'T MISS

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

DON'T MISS

San Francisco 49ers Acquire Eagles Edge Rusher Bryce Huff, AP Source Says

DON'T MISS

California Lawmaker Won’t Be Charged After Citation for Suspicion of Impaired Driving

DON'T MISS

California School Awards Dinner at Disneyland Comes With Hefty Price Tag

DON'T MISS

Fresno Police Release Video of Officer-Involved Shooting

DON'T MISS

Hamas Says It Is Still Reviewing a US Proposal for a Gaza Ceasefire

DON'T MISS

1 in 4 US Children Have Parents With Substance Use Disorder, Study Finds

DON'T MISS

Oreo Maker Mondelez Sues Aldi, Alleging Grocery Chain Copies Its Packaging to Confuse Customers

DON'T MISS

FAA Demands an Accident Investigation Into SpaceX’s Latest Out-of-Control Starship Flight

DON'T MISS

In Marseille, a Shadow Becomes Art in Banksy’s Latest Street Mural

UP NEXT

1 in 4 US Children Have Parents With Substance Use Disorder, Study Finds

UP NEXT

In Marseille, a Shadow Becomes Art in Banksy’s Latest Street Mural

UP NEXT

Dozens Sickened in Expanding Salmonella Outbreak Linked to Recalled Cucumbers

UP NEXT

Speaker Johnson Raises Campaign Money in Fresno

UP NEXT

UN May Cut Staff by 20%, Internal Memo Says

UP NEXT

Netanyahu Says Israel Accepts Witkoff’s New Gaza Truce Proposal, Media Report

UP NEXT

Business Insider Cuts 21% of Workforce, Memo Shows

UP NEXT

Harvard Agrees to Relinquish Early Photos of Slaves, Ending a Long Legal Battle

UP NEXT

Silence on E. Coli Outbreak Highlights How Trump Team’s Changes Undermine Food Safety

UP NEXT

Food Trucks in Gaza Raided, Underscoring Aid Distribution Problems

California School Awards Dinner at Disneyland Comes With Hefty Price Tag

2 hours ago

Fresno Police Release Video of Officer-Involved Shooting

2 hours ago

Hamas Says It Is Still Reviewing a US Proposal for a Gaza Ceasefire

2 hours ago

1 in 4 US Children Have Parents With Substance Use Disorder, Study Finds

2 hours ago

Oreo Maker Mondelez Sues Aldi, Alleging Grocery Chain Copies Its Packaging to Confuse Customers

3 hours ago

FAA Demands an Accident Investigation Into SpaceX’s Latest Out-of-Control Starship Flight

3 hours ago

In Marseille, a Shadow Becomes Art in Banksy’s Latest Street Mural

3 hours ago

Dozens Sickened in Expanding Salmonella Outbreak Linked to Recalled Cucumbers

3 hours ago

Ray Appleton Set to Resume His KMJ Show. E Curtis Johnson Retires

3 hours ago

Fresno Unified Communications Boss on Leave After AI-Generated FTA Dossier Debacle

3 hours ago

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

NEW YORK — Loretta Swit, who won two Emmy Awards playing Major Margaret Houlihan, the demanding head nurse of a behind-the-lines surgical un...

1 minute ago

1 minute ago

Loretta Swit, Emmy-winner Who Played Houlihan on Pioneering TV Series ‘M.A.S.H.,’ Has Died at 87

9 minutes ago

San Francisco 49ers Acquire Eagles Edge Rusher Bryce Huff, AP Source Says

20 minutes ago

California Lawmaker Won’t Be Charged After Citation for Suspicion of Impaired Driving

2 hours ago

California School Awards Dinner at Disneyland Comes With Hefty Price Tag

2 hours ago

Fresno Police Release Video of Officer-Involved Shooting

2 hours ago

Hamas Says It Is Still Reviewing a US Proposal for a Gaza Ceasefire

2 hours ago

1 in 4 US Children Have Parents With Substance Use Disorder, Study Finds

3 hours ago

Oreo Maker Mondelez Sues Aldi, Alleging Grocery Chain Copies Its Packaging to Confuse Customers

Help continue the work that gets you the news that matters most.

Search

Send this to a friend