Worries over trade rhetoric, which ramped up after China unveiled plans for additional tariffs on 106 U.S. products, waned after overtures were made regarding potential negotiation between the two countries.
Major U.S. stock averages finished higher on Wednesday after sliding earlier inside session. The Dow Jones industrial average rose 0.96 percent, or 230.94 points, to close at 24,264.30 — a bounce of more than 700 points by its session low.
Meanwhile, U.S. stock index futures pointed to gains for markets stateside, with Dow futures higher by 102 points in afternoon Asia trade. S&P 500 in addition to Nasdaq futures also tracked higher.
“The relief is actually in which neither party has pulled the trigger on tariffs,” Vishnu Varathan, head of economics in addition to strategy at Mizuho Bank, said in a note about the newly announced product duties.
Meanwhile, investors were hopeful in which talks between the U.S. in addition to China could mean a potential trade war might eventually be averted. China’s ambassador to the U.S. said in which negotiation remained China’s “preference” following his meeting with acting U.S. Secretary of State John Sullivan on Wednesday, Reuters reported.
“No date has been set for the proposed tariffs put forward by China or the U.S., meaning we could see uncertainty continue for the next couple of months. in which also means negotiation is actually still firmly on the table,” ANZ analysts said in a morning note.
The juxtaposition between the ongoing U.S.-China tit-for-tat in addition to hopes for trade talks is actually likely to remain in focus among investors.
“Our base case … remains in which negotiation in addition to de-escalation will be the likely endgame. Having said in which, China’s proportionate response has increased the risks of further escalation in ‘rhetoric’ inside coming weeks,” said Morgan Stanley analysts in a note.
The improvement in sentiment saw gold prices ease by the one-week highs touched overnight. Spot gold was last down 0.49 percent at $1,326.46 per ounce.
The additional tariffs announced by China on Wednesday came less than a day after the U.S. unveiled the list of Chinese imports, including high-tech products, in which could be targeted in response to what the White House deems an unfair trade relationship.
The dollar extended gains against the safe-haven yen following Wall Street’s overnight rebound, trading at 107.06 by 2:58 p.m. HK/SIN. in which compared to levels around the 105 handle seen at the beginning of the week.
Meanwhile, the dollar index, which tracks the U.S. currency against six peers, firmed to trade at 0.250.