Despite the threat of U.S. President Donald Trump on implementing tariffs over Chinese imports over the weekend, investors and experts continue to believe that the U.S. and China will still negotiate trades. The renewed hope on the trade deal gives stocks a chance to recover from the massive drop from losses until last Monday.
The China-US talks helped the Dow Jones Industrial Average witnessed the stock market index rise to 26,438.48, which takes its total to just 66.47 points down from its previous close. The S&P 500, meanwhile, dropped 0.4% from its previous close of 2,945.64 as it sits at 2,932.47. The Nasdaq Composite’s 8,123.29 also dropped 0.5% from its 8,164.00 previous close.
A report from CNBC about Chinese delegation making travel plans to the US for trade negotiations is a factor that affected the market’s recovery. However, the Chinese delegation plans to travel with fewer members than expected.
The Dow’s stock market index went down considerably by 471 points, while the S&P 500 saw its trade number fall 1.2% on its lowest. The Nasdaq, meanwhile, went as low as 2.2%. Despite Dow’s massive drop, Disney’s trade numbers rose 0.2% higher after a 1.5% fall. Disney’s rise managed to offset the decline of Dow. Also, Chevron and McDonald’s saw their trade percentage rise higher.
President Trump’s tweets on Sunday about the 25% rise on the 10% levies of Chinese goods amounting to $200 billion forced the stocks to drop. The shares fell lower after Trump claimed to impose 25% tariffs on Chinese imports worth $325 billion.
China continues to re-negotiate trade with the U.S.. Washington and Beijing plan to continue negotiations with trading on Wednesday. President Trump claims that the U.S. is getting hurt because China is gaining between $600 to $800 billion in trading annually. President Trump refuses to let the country lose over $500 billion anymore.
Chief Investment Strategist Michael Arone of State Street Global Advisors believes that the trade negotiations between the two countries will be beneficial in the long run. Arone also stated that the current debacle is only a minor hiccup as both sides are still willing to reach an agreement when it comes to trading. However, the White House’s upcoming meeting with the Chinese delegation will have the final decision on the trade negotiations.
Apple and Caterpillar shares are coming off their worst trade numbers as they drop one percent. Caterpillar dropped 3.4% while Apple witnessed its index fall by 3.9%. President Trump’s threats to spike tariffs caught the Wall Street experts off guard, leaving them worried about the comments’ effect on the equity market of the US. The Opportunistic Trader founder Larry Benedict stated that President Trump is pressuring China to counter his statements. The S&P 500 and the Nasdaq each sealed record closes this week.