The last time a trade war happened in the U.S., things didn’t go well for the economy. Will history repeat itself as Trump puts a tariff on steel and aluminum? Here are the facts. Just the FAQs
Stocks surged nearly 400 points Thursday on a double dose of positive news – plans for the U.S. and China to meet next month in a bid to resolve their trade war and a batch of generally solid economic data.
The market has swung wildly in recent months in response to both optimism and disappointment in the trade battle but investors seem to believe this time may be different. On Thursday, a Chinese state media outlet cited a possible “breakthrough” in the more than year-old standoff.
“The stock market is in rally mode,” says Jason Ware, chief investment officer of Albion Financial Group. “It’s getting the most out of positive news on the trade war.”
Also, an array of economic reports was encouraging.
The latest numbers on factory orders, service- sector activity, labor productivity and private-sector job gains all beat estimates. The private jobs total from payroll processor ADP sometimes foreshadows the Labor Department’s employment report, out Friday. And, initial jobless claims, a good gauge of layoffs, remained low last week.
Also bolstering investors outlook, Ware says, is that 10-year Treasury bond yields had been hovering below 2-year rates — an unusual yield curve inversion that typically signals a possible recession on the horizon – but in recent days the 10-year note edged marginally above the 2-year bond.
The Dow Jones industrial average closed up 373 points, or 1.4%, at 26.728. The Standard & Poor’s 500 index rose 38 points, or 1.3%, to 2,976. And the tech-heavy Nasdaq jumped 140 points, or