U.S. stocks rallied Tuesday morning, reversing opening losses, after the U.S. Trade Representatives office announced that new tariffs on Chinese imports, set to be imposed Sept. 1, will be delayed or scrapped altogether.
The news overshadowed concerns over slowing economic global growth and the potential for Beijing to crack down on protests in Hong Kong.
How are the major benchmarks performing?
The Dow Jones Industrial Average DJIA, +1.54% rose 432 points, or 1.7%, at 26,332, while the S&P 500 index SPX, +1.47% added 47 points, or 1.6%, to 2,929. The Nasdaq Composite index COMP, +1.84% rose 167 points, or 2.1%, to 8,033.
On Monday, the Dow slumped 389.73 points, or 1.5%, to end at 25,897.71, while the S&P 500 declined 35.56 points, or 1.2%, to finish at 2,883.09. The Nasdaq Composite closed at 7,863.41, a fall of 95.73 points or 1.2%.
What’s driving the market?
The United States Trade Representative announced shortly after the start of trade that there will be major revisions to the planned 10% tariff on $300 billion in annual imports from China which had been announced by President Trump August 1.
“Certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent,” according to the statement. “Further, as part of USTR’s public comment and review process, it was determined that the tariff should be delayed to December 15 for certain articles.”
Products subject to the delay include “cell phones, laptop computers, video game consoles, certain toys, computer monitors, and certain items of footwear and clothing,” according to the statement.
It remains unclear whether there are any new products which will face a 10% tariff starting Sept 1, though the USTR said further details will be published “as soon as possible.”