The S&P 500 and the Dow Jones Industrial Average had edged higher on Tuesday after White House economic adviser Larry Kudlow said a meeting between President Donald Trump and his Chinese counterpart on Saturday was an opportunity to “turn the page” on a trade war.
All three of Wall Street’s major indexes reversed losses following Kudlow’s comments days ahead of the high-stakes dinner between Trump and Xi Jinping after the G20 summit in Buenos Aires. But Kudlow also said the White House has been disappointed so far in China’s response to trade issues with the United States. On Monday, Trump had threatened to move ahead with additional tariffs on Chinese goods, due to take effect on Jan. 1.
“The volatility we’re seeing this afternoon is related to Kudlow’s comments,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York. “Across all sectors you see the market bouncing up and down and being very unsettled. And it’s primarily the tariff issue overhanging the market.”
General Motors Co shares dropped 2.5 per cent after Trump warned subsidies could be cut after the automaker said it would shutter US plants and lay off thousands of workers. “The GM thing is a war of words,” Ghriskey said. “Here’s a company trying to react to the market environment … and they’re being criticized for it.”
The Dow Jones Industrial Average rose 108.49 points, or 0.44 per cent, to 24,748.73, the S&P 500 gained 8.75 points, or 0.33 per cent, to 2,682.2 and the Nasdaq Composite added 0.85 point, or 0.01 per cent, to 7,082.70.
Of the 11 major sectors in the S&P 500, all but three closed the session in positive territory. Healthcare was the biggest percentage gainer with a 0.99 per cent increase, followed by gains in defensive sectors such as consumer