US stocks heaved a sigh of relief on Friday after President Trump’s tough talks against China did not include the announcement of new tariffs.
The Dow Jones industrial average fell by 368.97 points, or 1.4 percent, to 25,031.67 ahead of Trump 2 p.m. news conference. The index closed down just 17.53 points, at 25383.11, fell 0.07.
The S&P 500 rose 14.58 points, to 3,044.31, up 0.48 percent, while the Nasdaq was the biggest movers of the day, jumping 120.88 points, or 1.29 percent, to close at 9489.87.
Trump’s announcement is expected to add heat to the boiling battle between the world’s two largest economies and throwing cold water at the recent stock market rally. Instead, Trump announced that the US would no longer fund the World Health Organization and would eliminate Hong Kong’s special relationship status after Beijing intensified attacks on the city.
The two steps were grilled because Trump had threatened WHO for months and Foreign Minister Mike Pompeo earlier this week decided that Hong Kong no longer had sufficient autonomy from China.
“The world needs an answer from China about the virus. We must have transparency. Why did China close infected people from Wuhan to all other parts of China? “Said Trump from the White House Rose Garden.
“There is fear that it will lead to increased tensions between the US and China,” said Quincy Krosby, chief market strategist for Prudential Financial. “The concern is that this could lead to the sudden closure of phase-one trade agreements.”
The fear was not realized on Friday.
“That was partly a relief rally,” said Lindsey Bell, chief investment strategist for Ally Invest. “The market expects something far worse related to trade deals but not much can be chewed in the end. It’s just a big drop for people to buy it.”
Wall Street has made a comeback from accidents caused by coronaviruses over the past two months when countries began to ease lockouts aimed at controlling a pandemic. The S&P closed Thursday at only 10.7 percent below the all-time high reached in February.
Now markets have ignored the possibility of a trade war reignited with China when the country reopened from a pandemic, analysts expect more green days in the future.
“Investor optimism returned after a week in which some economic data became less dire,” Bell said.
With Post cable
