Dow futures jump 300 points as markets eye another serving of the TACO trade after Trump says ‘Don’t worry about China’
Investors are eyeing a rebound in the stock market after Friday’s trade war flare-up sent the S&P 500 to its worst loss since April.
On Sunday, President Donald Trump tried to calm nerves. Sharing on Truth SocialAfter announcing that it would implement it on Friday 100 percent additional customs duty to China and limit U.S. software exports.
“Don’t worry about China, everything will be fine!” wrote. “The highly respected President Xi has had a bad moment. He doesn’t want a crisis for his country, and neither do I. The US wants to help China, not hurt it!!!”
Meanwhile, Vice President J.D. Vance said: Fox News Sunday Morning Will ComeHe said both the United States and China were willing to act reasonably, although he insisted that Trump had “many more cards” than Beijing did.
The change in intonation contrasts with this Trump’s fiery rhetoric on Friday He attacked China over its new export controls on rare earths, which are critical inputs in a range of industries.
“Market participants appear to be once again turning to the TACO trade, driven not only by what we have seen in the recent past but also by conciliatory statements from both President Trump and Vice President Vance over the weekend suggesting that Friday’s announcement of additional 100% tariffs on Chinese imports will be little more than a negotiating tactic,” Michael Brown, senior research strategist at Pepperstone, wrote in a note on Sunday. supported.” he said.
Futures tied to the Dow Jones Industrial Average rose 344 points, or 0.75%. S&P 500 futures rose 0.94 percent and Nasdaq futures rose 1.2 percent.
The yield on the 10-year Treasury note fell 8.9 basis points to 4.059%. The US dollar increased by 0.23% against the euro and 0.65% against the yen. Gold rose 0.85 percent to $4,034.40 per ounce. U.S. oil futures rose 0.92% to $59.44 per barrel and Brent crude rose 1% to $63.35.
Trump previously imposed 145 percent tariffs on China, then suspended them to allow negotiations to continue. A similar situation occurred with other trading partners such as the European Union, causing Wall Street to ignore maximalist threats. TACO (Trump always shy) trade.
Trump’s new China tariff, which will take effect on Nov. 1 and raise the overall level to 130%, appears to be another example of Trump’s “de-escalation to de-escalate tensions” strategy, Brown said.
“Assuming this is another ‘TACO’ situation and some clarity has been achieved on this front before too long, this will likely prove another decline in stocks which should be viewed as a buying opportunity and the path of least resistance continues to rise, albeit in a somewhat choppy fashion,” he added.
