But the index surged by more than 200 points when the bell rang this morning, and the market only sped higher as the session progressed.
Here are five reasons why the stock market skyrocketed today.
Today’s Dow Jones rebound had one major trigger: the November jobs report .
Economists expected relatively-strong numbers, even after ADP’s disappointing private-sector data earlier in the week. But the Labor Department’s statistics were nothing short of spectacular.
The University of Michigan’s Consumer Sentiment Index also beat expectations, rising to 99.2 from 96.8 the previous month.
Altogether, today’s economic data suggest that the American consumer will end the year in good shape.
If the economy was Wall Street’s piece of cake, then a handful of trade-related headlines were the icing that metabolized the market’s sugar rush.
White House National Economic Council director Larry Kudlow said that the US and China are “close” to signing a trade deal . He maintained that President Donald Trump is prepared to “walk away” from a bad deal, but he did little to temper investor expectations.
“The deal is close. It’s probably even closer than in mid-November,” Kudlow said on CNBC. “Deputy level met again … The reality is constructive talks, almost daily talks. We are in fact close…There’s no arbitrary deadlines, but the fact remains December 15 is a very important date with respect to a no go or go on tariffs.”
Kudlow’s comments followed overnight reports that China would waive tariffs on US pork and soybean imports.
The reality is that China is suffering from a severe shortage of pork and needs to ramp up imports, but the waivers can double as a goodwill concession that demonstrates Beijing’s commitment to signing a trade deal.
When his off-the-cuff remarks sent the Dow into a tailspin earlier this week, Trump protested that he doesn’t watch the stock market. That, to borrow a phrase from Maury Povich, was a lie (or at least an “alternative fact” ).
As anyone on Twitter knows, Trump talks about the stock market constantly. As I write this, he just tweeted about the stock market 48 minutes ago.
The last time before that? Less than three hours earlier, at 8:16 am.
Investors know that Trump loves it when the Dow goes up, and hates it when the Dow goes down. They also know that he knows that stocks won’t react well if he follows through with his threat to raise tariffs on Dec. 15.
Following today’s trade war developments, bulls are gambling that Trump won’t risk escalating tensions and sparking another stock market plunge by pulling the trigger on those tariffs.