china, xi jinping, dow jones, trade war
Invesco’s chief market strategist warned that China has no reason to bow to Trump’s trade war demands. | Source: Shutterstock

The Dow and broader U.S. stock market bounced back on Wednesday, as investors tried to piece together a narrative to explain the apparent stalling of China trade negotiations ahead of next week’s summit in Beijing.

Dow Recovers

All of Wall Street’s major indexes traded lower through the morning session as investors shifted their focus to monetary policy and trade negotiations. The Dow Jones Industrial Average extended its slide to triple digits, reflecting a tepid pre-market for U.S. stock futures.

Markets bounced back sharply after the Federal Reserve concluded its policy meeting Wednesday afternoon by leaving its benchmark interest rate unchanged. The Dow rose 28 points, or 0.1%, to 25,914.16.

The broad S&P 500 Index of large-cap stocks climbed 0.3% to 2,840.03, with most major sectors reporting gains. Shares of energy companies led the advance, rising 1.5%.

The technology-focused Nasdaq Composite Index was last up 0.7% at 7,771.31.

A measure of implied volatility known as the CBOE VIX swung lower in afternoon trade. VIX, also known as the “fear index,” declined 2.1% to 13.28.

U.S.-China Trade War Back in the Spotlight

steven mnuchin, us-china trade war, dow
China and the United States are set to resume trade negotiations next week. | Source: Alex Wong / Getty Images / AFP

Stocks came under pressure late Tuesday after the Trump administration confirmed it was sending a trade delegation to Beijing next week to resume negotiations. As Hacked reported, Beijing seems to have reneged on some of its trade concessions because it isn’t convinced that the U.S. will lift tariffs on Chinese goods.

President Trump is sending his heavy hitters to Beijing in the week of March 25, a strong signal that both sides are looking to resolve their bitter dispute. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will be part of the delegation that is scheduled to meet with Chinese Vice Premier Liu He. Liu is expected to make a return visit to Washington, D.C. the following week.

Trade tensions between the two superpowers have cast a dark shadow over global economic growth. The International Monetary Fund and Organization of Economic Cooperation and Development have both downgraded their global growth forecasts for 2019. China’s economic stagnation shows no sigs of slowing anytime soon, as evidenced by the latest round of trade and industrial production data.

You May Also Like

Spend Your $1,000 Wisely on Cyber Monday. Consider These 4 Stocks

The average consumer will spend $1,000 this holiday season. Don’t be average, consider making your money work for you with these stocks.

Deutsche Bank Reveals the Real Reason Stock Market Is at All-Time Highs (& Why It Can’t Continue)

The US stock market is at all-time highs, but what’s driving this ten-year bull market? It’s stock buybacks, according to Deutsche Bank.

Dow Futures Rocket but Warren Buffett’s $128 Billion Skips Overpriced Market

Dow Jones Industrial Average (DJIA) futures point to new stock market highs, so why is Warren Buffett reluctant to invest?

US Steel (NYSE:X) Needs More Than Trump Tariffs to End 2019 in the Green

US Steel (NYSE:X) rose swiftly after President Donald Trump announced the reimposition of tariffs on imports from Brazil and Argentina.

Dow Pops While Trump Trade War Hits Unsettling Milestone

The Dow kicked off December with a recovery, but stock market bulls must wrestle with an unsettling trade war milestone.

5 Reasons Why the Dow Suffered a 200-Point Nosedive Today

The Dow Jones recoiled on Monday, relinquishing its gains and diving more than 200 points into decline. Here are five reasons why.