US stocks have jumped more than 1 per cent, bouncing back from a sharp sell-off the previous day as China stepped in to stabilise the yuan, easing concerns that currencies would be the next weapon in the US-China trade war.
China’s overnight intervention came after the US Treasury Department labelled Beijing a currency manipulator as it let the yuan slide to a more than decade low on Monday. The gains on Tuesday came a day after US stocks’ biggest percentage drop of the year and a sharp fall in the Chinese currency. China’s move to fix the yuan at a slightly stronger rate and White House economic adviser Larry Kudlow’s comment that President Donald Trump was planning to host a Chinese delegation for talks in September allayed fears of a further escalation in the trade war.
The S&P technology index, which includes companies that have a big exposure to China and were at the heart of Monday’s sell-off, provided the biggest boost to the S&P index, rising 1.61 per cent.
The Dow Jones Industrial Average on Tuesday rose 311.78 points, or 1.21 per cent, to 26,029.52; the S&P 500 gained 37.03 points, or 1.30 per cent, to 2,881.77; and the Nasdaq Composite added 107.23 points, or 1.39 per cent, to 7,833.27. The S&P 500 and Nasdaq each snapped a six-day losing streak. Stocks had been reeling from last week’s shock when Trump vowed to slap a 10 per cent tariff on a further $US300 billion in imports from China.Morning-Market-Note-Wednesday-7th-August