Shares, oil rebound on trade war thaw
North American stock markets rallied and oil prices surged after the Trump administration postponed tariffs on popular consumer goods imported from China, easing concerns that a protracted trade war would harm global growth.
U.S. President Donald Trump backed off his plan to impose 10-per-cent tariffs on Sept. 1 on remaining Chinese imports, delaying duties on cellphones, laptops and many other consumer goods in the hopes of blunting their impact on U.S. holiday sales. Equity, debt and currency markets sharply reversed course minutes after Wall Street opened for trade on news from Hong Kong about a call Chinese Vice Premier Liu He held with U.S. officials, says China’s Commerce Ministry.
Liu spoke with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin on Tuesday evening, a ministry statement said.
Shares of Apple Inc, a likely beneficiary of the tariff delay, rose 4.5 per cent and the information technology sector rose 2.46 per cent, the biggest gainer among the 11 S&P 500 sectors. Investors are closely watching the headlines and that’s what markets are trading off of, said Candice Bangsund, a global asset allocation strategist at Fiera Capital in Montreal.
“The news today is obviously good news. Risk appetite has improved drastically but it’s consistent with the environment of elevated uncertainty,” Bangsund said.
Crude oil jumped the most since early January. Futures surged 4.6 per cent in London on Tuesday, settling above US$61 a barrel for the first time in more than a week.