Major US equity indices witnessed a positive opening on Tuesday and recovered a major part of overnight losses, triggered by the latest developments on the trade-related front.
Trade tensions between the world’s two largest economies escalated further after the US President Donald Trump imposed new tariffs on about $200 billion worth of Chinese goods and warned to pursue tariffs on $267 billion of additional imports if China takes retaliatory action.
Subsequently, China also announced the new retaliatory tariffs on $60 billion worth of American goods and the rate will range between 5% and 10%. The developments were the latest indications of a possible full-blown US-China trade war and dented investors’ appetite for perceived riskier assets – like equities.
Despite persistent trade issues, the US markets have shown remarkable resilience and remained within striking distance of all-time record high levels, supported by strong growth in corporate earnings and improving domestic economic data.
At the time of writing this report, the Dow Jones Industrial Average gained over 80-points to 26,143 and the broader S&P 500 Index added nearly 10-points to move back closer to the 2,900 mark. Meanwhile, tech-heavy Nasdaq Composite Index climbed around 40-points to 7,935.
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