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 5 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

Whitey Herzog, Hall of Fame Manager Who Led Cardinals to 1980s Success, Dies at 92

DON'T MISS

Coalinga-Huron Teachers Say They’ll Strike Unless a Fair Contract Is Offered

DON'T MISS

Coalition: CA Lawmakers Need to Roll Back Proposed ‘Utility Tax’

DON'T MISS

CA’s High Construction Costs Limit Housing. A Supreme Court Decision Might Help

DON'T MISS

Now’s the Time to Register for FUSD’s Free Preschool and T-K

DON'T MISS

‘Hopeville’ Literacy Documentary Showing Tonight at Roosevelt High

DON'T MISS

Michigan Faces Probation for Football Recruiting Violations; Case vs. Jim Harbaugh Pending

DON'T MISS

What Winnie the Pooh and Mickey Mouse Can Tell Us About the Public Domain and Remix Culture

DON'T MISS

Acquisition of Historic Fresno Real Estate Brand Creates Area’s Largest Brokerage

DON'T MISS

Wall Street’s Mixed Trading Day

UP NEXT

New Recruiting Programs Put Army, Air Force on Track to Meet Enlistment Goals. Navy Will Fall Short

UP NEXT

Justice Thomas Misses Supreme Court Session Monday With No Explanation

UP NEXT

‘Civil War’ Declares Victory at the Box Office, Toppling ‘Godzilla X Kong’

UP NEXT

Scheffler Turns the Masters Into Another Sunday Yawner With a Dominating Win

UP NEXT

Vegas, US Tour and More Signings: Wrexham Has Plenty of Fun and Work Ahead After Latest Promotion

UP NEXT

NBA Play-in Game Preview: West Games on Tuesday, East Games on Wednesday, Eliminations on Friday

UP NEXT

Ship That Caused Bridge Collapse Had Apparent Electrical Issues While Still Docked, Source Says

UP NEXT

The Latest | World Leaders Urge Israel Not to Retaliate for the Iranian Drone and Missile Attack

UP NEXT

US Shoots Down Iran-Launched Attack Drones as Biden Team Pledges ‘Support’ for Israel

UP NEXT

A Mission of Mercy, Then a Fatal Strike: How an Aid Convoy in Gaza Became Israel’s Target

CA’s High Construction Costs Limit Housing. A Supreme Court Decision Might Help

10 hours ago

Now’s the Time to Register for FUSD’s Free Preschool and T-K

Local Education /

10 hours ago

‘Hopeville’ Literacy Documentary Showing Tonight at Roosevelt High

Local Education /

11 hours ago

Michigan Faces Probation for Football Recruiting Violations; Case vs. Jim Harbaugh Pending

11 hours ago

What Winnie the Pooh and Mickey Mouse Can Tell Us About the Public Domain and Remix Culture

11 hours ago

Acquisition of Historic Fresno Real Estate Brand Creates Area’s Largest Brokerage

Breaking News /

12 hours ago

Wall Street’s Mixed Trading Day

12 hours ago

It’s ‘Signing Day’ for These Clovis Unified Youngsters

Local Education /

12 hours ago

Clovis Armed Robbery and Pursuit Result in 3 Arrests, 1 Suspect Still at Large

12 hours ago

Charges Against Trump and Jan. 6 Rioters at Stake as Supreme Court Hears Debate Over Obstruction Law

12 hours ago

Whitey Herzog, Hall of Fame Manager Who Led Cardinals to 1980s Success, Dies at 92

NEW YORK — Whitey Herzog, the gruff and ingenious Hall of Fame manager who guided the St. Louis Cardinals to three pennants and a World Seri...

5 hours ago

5 hours ago

Whitey Herzog, Hall of Fame Manager Who Led Cardinals to 1980s Success, Dies at 92

6 hours ago

Coalinga-Huron Teachers Say They’ll Strike Unless a Fair Contract Is Offered

9 hours ago

Coalition: CA Lawmakers Need to Roll Back Proposed ‘Utility Tax’

10 hours ago

CA’s High Construction Costs Limit Housing. A Supreme Court Decision Might Help

Local Education /
10 hours ago

Now’s the Time to Register for FUSD’s Free Preschool and T-K

Local Education /
11 hours ago

‘Hopeville’ Literacy Documentary Showing Tonight at Roosevelt High

11 hours ago

Michigan Faces Probation for Football Recruiting Violations; Case vs. Jim Harbaugh Pending

11 hours ago

What Winnie the Pooh and Mickey Mouse Can Tell Us About the Public Domain and Remix Culture

MENU

CONNECT WITH US

Search

Send this to a friend