StOCKS BOuNCE BACK FROM tRADE tREMORS

“Trade uncertainty is the main headwind to the market,” Charles St-Arnaud, an investment strategist at Lombard Odier Asset Management in London, said by phone. “At this juncture we need to be careful. The macro picture hasn’t changed massively yet. Growth remains robust, unless we go into a bigger trade war.”

In New York, the Dow Jones industrial average closed up 230.94 points at 24,264.30. The S&P 500 index ended up 30.24 points at 2,644.69 and the Nasdaq composite index was up 100.83 points at 7,042.11.

The Canadian dollar averaged US78.07 cents, up 0.02 of a US cent.

The market oscillations come as investors try to determine whether the two countries will follow through on the threats of tariffs, said Kathryn Del Greco, vice president and investment advisor at TD Wealth.

“The No. 1 concern to the market right now is the tariff negotiation tactic that seems to be back and forth, sort of like a game of ping pong, between China and the U.S., to see what really in effect is going to come to fruition.

“The market is trying to grapple with the seriousness, or the likelihood, of this actually being implemented, or is this just really the negotiation process that is going to ultimately lead to a better structured deal between these two countries.”

U.S. President Donald Trump’s administration laid out on Tuesday the US$50billion worth of Chinese goods that could face tariffs, with China responding Wednesday with a list of U.S. goods that could face retaliatory tariffs including soybeans and aircraft.

Both sides have, however, given themselves room to manoeuvre, including comments from recently-appointed National Economic Council Director Larry Kudlow suggesting the U.S. tariffs won’t be implemented if China lowers barriers to trade.

The openness to negotiations match strategies that are becoming hallmarks of the Trump administration, said Del Greco.