By CCN.com: The US stock market swung back into recovery mode on Tuesday, positioning the Dow to mount a triple-digit gain just one day after trade war tensions dropped a grenade on Wall Street.
The Dow Jones Industrial Average roared during the Tuesday morning session, and by 11:18 am ET the index had gained 255 points or 1.01% to recover to 25,579.97. The S&P 500 climbed 0.93% to 2,838.07, and the Nasdaq soared 1.09% to 7,730.17 as US stocks scrambled to avoid another punishing sell-off.
Twenty-seven of the Dow’s 30 members recorded gains, led by Dow Inc (2.41%), Visa (2.19%), and Boeing (1.98%).
Stock futures jerked higher on Tuesday morning after US President Donald Trump revealed that he would meet with Chinese President Xi Jinping at the G-20 summit in June, giving the two leaders a chance to hash out their countries’ differences following the sudden end to the trade war ceasefire.
Trump expressed optimism that the two economic superpowers could strike a deal, even as the US Trade Representative’s office prepares to smack another $300 billion worth of Chinese goods with a 25% tariff.
“When the time is right we will make a deal with China. My respect and friendship with President Xi is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn’t make any sense,” Trump tweeted on Tuesday.
Here. We. Go. Again.
Please tell me I’m not the only one suffering from trade war deja vu.
Trump and his officials fattened equities valuations throughout the first four months of 2019 by feeding us a steady diet of trade deal optimism. The chaos that transpired when Beijing abruptly erased months of negotiating “progress” should have been sufficient to expose the administration’s lack of credibility on US-China relations.
At this point, it’s hard to see investors as anything but masochistic. Why else would they continue to lap up every half-cocked Trump tweet as though it was transmitted from Mount Olympus by the Oracle of Delphi herself?
At least the Oracle of Delphi got it right once in a while.
No, it increasingly appears that after a decade of unbridled bullishness, Wall Street is desperate to maintain that euphoric narrative as long as possible, even if that means allowing Trump to string them along on a trade deal that’s always just out of reach.
Meanwhile, Axios reports that senior Trump administration officials have absolutely no confidence that the US and China will pound out a firm agreement within the near future.
The stock market, that report suggested, should buckle up for a “long trade war.”
But who are Axios and unnamed Trump administration sources to stand between the Dow and a new all-time high?
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.com.
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Last modified: July 2, 2020 8:10 PM UTC