U.S. stocks wiped out earlier losses and moved higher Friday after Treasury Secretary Steven Mnuchin described high-stakes trade talks with the Chinese delegation in Washington as “constructive.”
Mnuchin made the remarks to reporters after the negotiations between the two countries ended with no deal. The Chinese delegation is expected to leave Friday evening.
The Dow Jones industrial average closed up 114 points, or 0.44% at 25,942, while the Standard & Poor’s 500 index rose 11 points, or 0.37%, to 2,881. The tech-heavy Nasdaq edged up 6 points, or .08%, to 7,916.
The Dow had fallen nearly 350 points earlier. The comeback broke a four-day string of losses for the market but the S&P 500 still turned in its worst week of the year, falling 2.2%. Yet the broad index is still up 15% this year.
Traders are jittery about an intensifying trade war with China. The discussions on Friday followed new, higher tariffs on $200 billion of Chinese goods that the Trump administration imposed at midnight.
“Investors are uncomfortable with uncertainty,” said Charlie Wilson, managing director at Thornburg Investment Management, in an email. “An escalation in the trade war between the U.S. and China increases the uncertainty about near term growth and the impact on company earnings.”
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President Trump posted a flurry of tweets on Friday morning, praising the increased tariffs and the robust economy in the U.S. He also said that the “process has begun” to raise duties on an additional $325 billion in Chinese imports. He also said there was “no need to rush” the trade talks this week.
“I don’t know if that is easing anybody,” said Dom Catrambone, CEO of Volshares’ issuer Whitford Asset Management. “But I do think the tweets are very deliberate, stating how strong of an economy we have, to show China that we can withstand this.”
The markets are down for the week after fears of a trade war escalated following Trump’s threat on Twitter Sunday of increased duties on Chinese imports. The administration said China had backpedaled on its earlier proposals, prompting the president’s threat.
China’s Commerce Ministry on Thursday said the country would retaliate by imposing “necessary countermeasures” if higher tariffs went into effect on Friday. So far, China has not made any moves.
The sell-off also comes as shares of Uber, the ride-hailing company, debuted on the Nasdaq. Its stock was down 38 cents, or 0.85%, to $44.65 per share. Its initial offering price was $45 a share.