Stocks Rebound from Last Week’s Sell-Off
The stock market is up today after closing last week with big losses across the board.
Stocks rallied after President Trump told reporters that the Chinese government called his office twice to request that negotiation between the two countries resume.
The Chinese press denies that a call was made.
Last week, the Chinese government announced tariffs on over $75 billion on U.S. goods, including agricultural products, crude oil, and automobiles.
The news sparked a 75-point slide in the S&P 500, which closed Friday’s session down 2.59%.
Nasdaq fared even worse, closing with an even 3% decline, and the Dow ended the day down 2.37%.
The President quickly responded by raising existing tariffs on Chinese goods by 5% to 30% overall. He also increased tariffs scheduled to go into effect on September 1st from 10% to 15%.
The market relaxed a few weeks ago under the belief that tensions between the U.S. and China might be easing, but last week’s events certainly dispelled those notions.
Both sides are digging their heels in for a long-term conflict, and that’s the last thing the market wants.
Expect a volatile week in stocks, with more Trump tweets and trade headlines fueling the insanity.
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Last week’s tariff headlines hurt the crude oil market too. China announced it would target U.S. oil exports for the first time as part of its new tariffs on American goods.
The news sent crude futures sliding by over 2.1%. Tariffs create even more demand problems for an already-struggling oil market.
Crude oil futures are currently trading for about $53, but they are still higher than their August low of $51.09
Tariff uncertainty sparked a rally in risk-off assets, including gold, on Friday.
Gold closed at $1,537 on Friday, notching a 1.92% gain that extended gold’s 2019 rally to 19.6%, year to date.
Markets are facing a lot of uncertainty over the coming months, and gold is looking like a popular safety asset for nervous investors across the globe.
Bitcoin was surprisingly stable throughout the tariff shake-up.
The leading cryptocurrency traded in a relatively narrow range between $10,500 and $10,000, starting on Thursday, and stayed in that range through the weekend.