Financial News

Dow leaps up 669 points as trade war fears cool

By Carleton English 

AP

Trade war, what trade war?

After facing its worst week in two years, Wall Street came roaring back Monday, with the Dow Jones industrial average posting its third-largest point gain ever.

The blue chip index climbed 669.40 points, or 2.4 percent, to 24,202.60, as investors shook off fears of a trade war between the US and China.


The S&P 500 and Nasdaq also rallied, posting gains of 2.7 percent and 3.3 percent, respectively.

“This was basically a defusing of the fear factor of tariffs,” Peter Cardillo, chief market economist at First Standard Financial, told The Post.

The Dow plunged more than 1,100 points late last week as the US and China traded barbs on tariffing each other’s goods.

On Thursday, President Trump announced tariffs on up to $60 billion of Chinese imports. China responded Friday by threatening tariffs on $3 billion of US goods and signaling that it may curb purchases of US debt.

But despite the tough talk, the market opened solidly in the green Monday as investors weighed data over the weekend that eased the threat of a trade war.

“There can be a lot of verbal posturing with the intent of striking a better balance, Eric Freedman, chief investment officer at US Bank Wealth Management, told The Post. He called last week’s talk “pregame chatter.”

Also helping matters were comments by Treasury Secretary Steve Mnuchin, who said in a Fox News interview on Sunday that he was “cautiously hopeful” the US and China would reach a trade deal.

“We’re working on a pathway to see if we can reach an agreement as to what fair trade is for them,” Mnuchin said.

For traders, that was enough indication for buyers to enter the market or short sellers to cover their negative bets, Jamie Cox, managing partner at Harris Financial, told The Post. “[Last week’s] sell-off may have gone a little too far.”

“[Tuesday] will be the test. The buyers have to be there,” Cox said.