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U.S. stocks rebounded Tuesday from overnight losses after Washington reassured investors that the trade accord with China was still intact.
The Dow Jones industrial average climbed 200 points, after futures briefly shed 400 points Monday evening. The Standard & Poor’s 500 added nearly 1%, retracing losses after dropping 1% overnight.
Investors were spooked by reported comments by White House trade adviser Peter Navarro suggesting the U.S. trade deal with China was in trouble. Navarro, however, said his comments were taken out of context, and President Donald Trump tweeted that the agreement with China, the basis for a truce in a tariff war over technology and other problems, is still on.
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Comments by either side suggesting progress or problems with the trade agreement have added to the uncertainties prevailing in the midst of the pandemic, pushing and pulling at share prices. The Federal Reserve and other global central banks have intervened to calm markets in recent months in an effort to restore confidence among investors after the pandemic battered the global economy.
“It appears this administration is ever so confused as the president says one thing and his trade advisor says another,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a note. “We believe these types of uncertainties could lead to another round of unsettled markets in spite of the Fed’s printing presses working at full speed.”
After some early losses, global markets pressed higher in Asia and Europe.
Investors appeared to look past reports of surging coronavirus cases in the U.S. and other countries to focus on evidence of economic recovery. Volatility has picked up in recent weeks after stocks rebounded more than 40% from their March lows on hopes the worst of the pandemic was over.
Sales of new single-family homes, a leading housing market indicator, rose more than expected in May, a sign the housing market is recovering in the wake of the pandemic. New home sales jumped 16.6% last month to a seasonally adjusted annual rate of 676,000 units, the Commerce Department said Tuesday.
Further updates on the U.S. economy are expected toward the end of this week, when the government will issue data on consumer spending, weekly unemployment aid applications and durable goods orders.
Benchmark U.S. crude oil added 78 cents to $41.51 a barrel. Brent crude, the international standard, rose 86 cents to $43.93 per barrel.
In Europe, France’s CAC 40 gained 1.6%, while Germany’s DAX rallied 2.6%. Britain’s FTSE 100 gained 1.3%. Japan’s benchmark Nikkei 225 added 0.5%. Hong Kong’s Hang Seng index jumped 1.6% and South Korea’s Kospi climbed 0.2%. The Shanghai Composite gained 0.2%.
Contributing: The Associated Press
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