By CCN Markets: The Dow and broader U.S. stock market shot higher on Tuesday, bucking a dismal start to the trading day after the Trump administration announced it would delay new tariffs on several categories of Chinese goods. However, delays don't mean the trade war…
By CCN Markets: The Dow and broader U.S. stock market shot higher on Tuesday, bucking a dismal start to the trading day after the Trump administration announced it would delay new tariffs on several categories of Chinese goods.
However, delays don’t mean the trade war is over. Fresh duties on several Chinese imports will go into effect early next month, with the remainder scheduled to follow on December 15.
All of Wall Street’s major indexes rose, offsetting a brutal start to the week that saw the Dow fall nearly 400 points. On Tuesday, the Dow Jones Industrial Average rose by as much as 519 points. It was last up 387.77 points, or 1.5%, at 26,295.14.
Shares of Apple Inc. (NASDAQ:AAPL) outperformed the market, gaining 4.6%. Intel Corp (NASDAQ:INTC) and Caterpillar Inc. (NYSE:CAT) rose 3% and 2.2%, respectively.
The broad S&P 500 Index of large-cap stocks surged 1.6% to 2,929.96, with all 11 primary sectors reporting gains. Information technology was the stand-out performer, gaining 2.5%. Eight other sectors reported gains of at least 1%.
Surging technology shares propelled the Nasdaq Composite Index to gains of 2%, where it reached 8,024.24.
Markets rallied on Tuesday after the U.S. Trade Representative said several categories of Chinese consumer goods would not be subject to proposed tariffs until December 15. However, the vast majority of the $300 billion worth of goods targeted for tariffs will be taxed beginning September 1. In fact, the September 1 tariff list is 122 pages long compared with only 21 pages for the December 15 tariff list.
Last week, President Trump indicated he is not ready to make a deal with China and raised doubts about whether both sides would even meet next month as planned. The U.S. government has even declared China a currency manipulator for letting the value of the yuan renminbi fall to 11-year lows.
At this rate, a trade deal before the 2020 U.S. presidential election is highly unlikely. The constant state of limbo may be bad for stocks, but it’s politically advantageous for Trump as he tries to secure a second term in office.
Last modified: January 10, 2020 3:31 PM UTC