While the stock market edged back toward its session highs, Trump appeared unable to offer anything fresh for bulls to chew on. The trade war barometer, USD/CNH, ominously leaped 0.5%.
As of 12:38 pm ET, the Dow Jones Industrial Average had climbed 250.52 points or 0.98% to 25,879.42.
After Trump and Macron made brief statements, the French president responded to a question about his view on the China-US trade standoff. Macron echoed the opinion of many stock market analysts, that if the global economy is going to recover, an agreement must be made.
“Discussions underway between the US and China are disturbing investors… Our deep wish is for an agreement to be found between the United States and China. It has to be a balanced agreement that is good for everyone. What’s bad for the world economy is uncertainty.”
The most significant reaction from the Dow came after Trump was asked the question, “Is China sincere, or just trying to calm markets?”
His response initially boosted markets, but bulls lost patience on a lack of any new insight, as the president stated:
“The Vice Chairman of China came out that he wants a deal to be made under calm conditions… China has lost 3 million jobs; their chain is breaking up like no one has seen before. The longer they wait, the harder it is to put it back. The tariffs have hit them very hard. They’ve manipulated their currency, devalued their currency. President Xi is a great leader and a brilliant man.”
The Trump-Macron press conference also touched on another topic with implications for US trade relations: France’s controversial “digital tax.”
Macron teased that the US and France had almost reached an agreement regarding the digital tax, but Trump dodged a question late in the presser, refusing to promise that the White House wouldn’t retaliate by placing tariffs on French wine.
A possible US-Iran meeting is also in the pipeline, as Trump signaled he would be prepared to meet with Hassan Rouhani.
Further signaling a softening stance on trade, Trump debunked claims that there had been no calls between the US and China, boasting of “numerous” communications and shrugging off his Dow-battering trade policy as “just the way I negotiate.”
Apple was the top Dow stock on the day, bouncing 1.95% as investors bought the dip on hopes that the trade war has achieved peak escalation and that both sides will now attempt to de-escalate.
Johnson & Johnson spent much of the morning in the red, but as of the time of writing it had bounced back to a 0.5% gain.
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Last modified: June 23, 2020 2:34 PM UTC