By CCN.com: The Dow sped toward substantial gains on Friday, as Wall Street prepared to exhale following a volatile – and brutal – week for the US stock market.
Investors chewed on some positive news on the trade war front, but at least one analyst fears that Trump’s latest overtures to China are too little, too late.
All of Wall Street’s major indices opened sharply higher, though it’s likely that they will finish the week far below last Friday’s close.
The Dow Jones Industrial Average rose 200 points following the opening bell, and it continued to grind higher as the session continued. As of 11:04 am ET, the DJIA had surged 329.22 points or 1.29% to 25,908.61.
The S&P 500 climbed 42.9 points or 1.51% to 2,890.5. The technology, financials, and industrials sectors each rose more than 1.6%.
The Nasdaq – the only one of Wall Street’s three primary stock indices to decline on Thursday – bounced back with a 133.76 point or 1.72% advance to 7,900.38.
The CBOE VIX, a measure of implied volatility, dipped 12.51%, edging below its historical mean to 18.53.
Wall Street enjoyed a welcome respite from the deluge of bad news that has rained down on the market in mid-August, and investors cheered a positive – if minor – development in US-China trade relations.
On Thursday, President Trump teased that he planned to speak directly with Chinese President Xi Jinping on the phone, as the two countries scramble to salvage what – if any – progress remains following three months of frosty relations.
“I will speak to him. We have a call scheduled soon – [with] President Xi,” Trump said, according to a report in the South China Morning Post. “We’re talking by phone and we’re having very productive talks. They would like to do something, I will tell you that.”
Earlier, Trump seemed to suggest that he would like to meet with Xi in person, the latest conciliatory gesture following the White House’s decision to delay the imposition of some of the new tariffs scheduled to take effect on September 1.
Hedge fund manager Kyle Bass says that Trump “blinked” after observing the devastating impact his surprise tariff announcement had on the stock market, which could explain what looks like a renewed focus on signing a trade deal – rather than winning a trade war.
However, Liz Ann Sonders, chief investment strategist and vice president at Charles Schwab, warns that it could be too late to undo the damage that the trade war has already wreaked on the stock market.
“We’re really looking at an environment, I think, where too much damage has been done on the perception of both sides to expect a deal that looks anything like the comprehensive deal that was hoped for even a few months ago,” Sonders told Yahoo Finance.
Friday’s rally took a small bite of the stock market’s grisly August decline. However, the Dow remains sharply in the red for the week, and the index had still declined more than 6% over the past month heading into Friday’s session.
Last modified: June 23, 2020 2:36 PM UTC