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Wall Street rebounds to strong close as worries over US-China trade war recede somewhat

Last updated: 16:10 18 Sep 2018 EDT, First published: 02:17 18 Sep 2018 EDT

US stocks climb across the board

Wall Street stocks finished higher across the board on Tuesday, taking in stride China's retaliation on the trade front as fears of a trade conflict appear to have abated somewhat.

China responded to US tariffs with a tariff of its own of US$60bn worth of goods, but there will only be a 10% tariff instead of its initial plan for tariffs as high as 25%.

The Dow Jones Industrial Average surged more than 185 points or by 0.7% to settle at 26,246.

The tech-heavy Nasdaq jumped more than 60 points or by 0.76% to close at 7,956.

Tesla Inc (NASDAQ:TSLA) was a top decliner on the index after reports of a US Securities and Exchange Commission criminal investigation into CEO Elon Musk’s tweet about a go-private plan he eventually abandoned. Tesla stock settled 3.35% down at US$284.96.

The S&P 500 was up 0.5% to end at 2,904.

The Russell 2000 small-cap index saw slight gains, adding 0.5% to conclude at 1,712.

In Canada, the TSX was up 0.5% to trade near 2,905.

1:37 PM: Dow jumps 170 points as trade fears lessen and tech stocks climb higher

The US benchmarks were on the rise this afternoon as trade fears were somewhat calmed.

China responded to US tariffs on its imports with a tariff of its own of US$60bn worth of goods, but there will be a 10% tariff instead of its initial plan for tariffs as high as 25%.

The US goods affected include meat, nuts, alcoholic drinks, chemicals, clothes, machinery, furniture and auto parts.

The Dow Jones Industrial Average surged more than 170 points, led higher by Nike Inc (NYSE:NKE) and Intel Corp (NASDAQ:INTC).

The tech-heavy Nasdaq jumped more than 75 points in afternoon trading. Micron Technology Inc (NASDAQ:MU) was a top gainer.

Tesla Inc (NASDAQ:TSLA) was a top decliner on the index after reports of a US Securities and Exchange Commission criminal investigation into CEO Elon Musk’s tweet about a possible privatization.

The S&P 500 was up around 18 points by midday.

The Russell 2000 small-cap index saw slight gains, boosted by Viking Therapeutics Inc (NASDAQ:VKTX) after its positive drug trial lifted its shares.

Up north, the TSX was up more than 90 points due to rising oil prices.

10:00 AM: US stocks climb in morning trade as worries over US-China trade battle are pushed aside

US stocks opened on the front foot on Tuesday as energy and tech stocks jumped and concessions were made in the trade battle between the US and China.

China has revealed plans to retaliate in response to new US trade tariffs and starting on September 24, Beijing will impose levies on more than 5,000 US products. But investors have been calmed by news that China is now looking to introduce just a 10% tariff on some goods, instead of 20%.

The move came after President Trump announced that the US would slap 10% tariffs on US$200bn worth of Chinese imports to start and then increase those tariffs to 25% by the year’s close.

Early in the session, the Dow Jones Industrial Average Index gained 92 points to 26,157, pushed up by a 1.8% jump from Caterpillar (NYSE:CAT), a trade bellwether, as well as a 1.3% gain from the iPhone maker Apple (NASDAQ:AAPL) after the US opted to exclude Apple watches from tariffs on US$200bn worth of Chinese goods.

US energy stocks were trading 1.2% higher after oil prices jumped above US$79 a barrel while tech stocks jumped 0.83%.

The S&P 500, meanwhile, clung closer to the baseline to add 11 points at 2,899, led by Union Pacific Corp, Universal Health Services, Unum Group, TechnipFMC PLC and Hess Corp.

Elsewhere, the tech-laden Nasdaq picked up 51 points to 7,947, helped out by its best performer Netflix (NASDAQ:NFLX) , which added 2.3% after the  streaming service brought in 23 Emmy awards for its television serial programs.

Up in Canada, Toronto’s TSX gained 36 points to 16,119 while the Russell 2000 index of small-cap stocks added 6.5 points to 1,710.

7:17 AM: US stocks set for positive open as as Trump announces fresh round of tariffs; European shares modestly higher

After a negative finish, US stocks are poised to start higher Tuesday, despite a fresh round of trade tariffs imposed by America on China.

Duty on Chinese goods worth US$200bn will go into effect next week under President Trump's latest plan.

Combined witn tariffs he has already set, the move will mean that around half of the products that China sells to the United States each year will be hit by the taxes.

Yesterday on Wall Street, the Dow Jones Industrial Average closed down around 92 points at 26,062; the S&P 500 finished down  16, while the Nasdaq exchange plunged a whopping 114 points at 7,895.

In futures trade today, the Dow Jones is ahead by 21 points; the Nasdaq is up 14.25 and the S&P 500 futures are trading 1.25 points higher.

In London, FTSE 100 is up around 11 points at 7,313, the German DAX is up 28 at 12,125 and the French CAC 40 is ahead by around  11.

Meanwhile, in Asia overnight, stocks surged.  Japan's  Nikkei 225 added over 325 points at 23,420, while the Shanghai Composite Index  added around 48 at  2,699.

Chris Towner, director at JCRA, an independent financial risk management consultancy, said: “Today’s announcement is a significant development in the ongoing trade wars between the US and the rest of the world and will affect around 6,000 items, representing the biggest round of US tariffs so far.

"China will undoubtedly retaliate and this could have significant impact not only on US companies but more globally as well as higher prices which will affect global supply chains."

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