The trade tension pendulum has swung the other way. After both the U.S. and China made conciliatory comments earlier in the week, it seems that the rhetoric is now going the other way.
According to a state-run media agency, Chinese Commerce Ministry spokesman Gao Feng accused the United States of “bullying behavior.” The commentary comes after the United States raised tariffs on $200 billion of Chinese goods, and China, in retaliation, announced increased tariffs on U.S. goods that are scheduled to start in June.
But it’s notable that the losses Wall Street is facing early Friday, based on equity index futures, aren’t as large as losses faced in recent days. It seems that the market’s repricing may have come to a new equilibrium that will allow smaller ups and downs based on headlines even as volatility continues. But it’s still early, and this week’s action should serve as a reminder that a selloff could be magnified—or erased—by week’s end.
The market has taken solace in comments that the world’s two largest economies are still talking to each other. Treasury Secretary Steven Mnuchin told U.S. lawmakers that he expects to continue trade talks in Beijing in the near future. However, China has said it doesn’t know about those plans.
In earnings news this morning, a couple technology firms were in the spotlight. Chipmaker Nvidia Corporation (NASDAQ: NVDA) reported fiscal Q1 earnings that beat third party estimates, however it retracted its full-year guidance, which had anticipated stronger sales in the second half of the year. NVDA was aiming down in premarket trade Friday. NVDA’s revenue was down 31% year over year, with its gaming segment down 39%. Still its gaming segment sales were stronger than expected, up 11% over the previous quarter. Its chips, or Graphics Processing Units (GPUs), have been