Stocks shook off early session worries Monday that President Trump’s threat to increase tariffs sharply this week on Chinese goods would threaten trade talks — a fear that initially pummeled the Dow Jones Industrial Average by more than 400 points — and recovered much of the day’s declines.
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Trump, in a pair of tweets on Sunday, said he would increase tariffs to 25 percent from the current 10 percent on $200 billion of Chinese goods. On Monday, the president tweeted that the U.S. loses $500 billion a year to China.
Trump, who has called himself a “tariff man,” said he’s losing patience. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump tweeted.
That worried Wall Street investors who feared that the president’s weekend threats would cause a Chinese trade delegation, set to visit Washington, D.C., this week to cancel the trip.
In the first few hours of trading, the three major averages experienced their heaviest selling since March 22; shortly after the opening bell 29 of the Dow Jones Industrial Average’s 30 components were lower.
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However, Chinese authorities confirmed, according to CNBC, that despite the fresh tariff threat they would still send a large delegation to the U.S. to continue talks this week aimed at resolving the one-year standoff between the world’s two biggest economies,
That appeared to ease Wall Street fears and lift the sentiment of investors who trimmed the day’s losses on the major indexes. The Dow recovered about 400 points near the end of Monday’s session.
While the Dow, S&P 500 and Nasdaq Composite all closed modestly lower, the small-cap Russell 2000 rebounded from a 1.56 percent plunge to finish the day with a slight gain.
Bank of America Merrill Lynch analysts said the market’s early session