US stocks fell for a fourth straight day, but managed to pull themselves off their session lows after President Donald Trump said a trade deal with Beijing was still possible — comments that helped beat back some of the market jitters set off by his threat to ramp up tariffs on China this week.
The S&P 500, which had been down by as much as 1.5 per cent, closed down 0.3 per cent at 2,870.72. The Dow Jones Industrial Average finished 0.5 per cent lower at 25,828.36 after having dropped 1.7 per cent. The Nasdaq Composite fell 0.4 per cent to 7,910.58, compared to the 1.9 per cent decline earlier in the day.
The bounce back comes after Mr Trump said on Thursday that he received a “beautiful letter” from Xi Jinping, his Chinese counterpart, urging the two countries to “work together” to resolve their differences on trade. The comments, coming ahead of the start of another round of top-level negotiations this afternoon, gave investors some much needed hope that the two sides may be able to reach a compromise on trade.
But underscoring the severity of this week’s sell-off, the losses still put the three indices on track for their worst week since late December, when stocks plunged on trade fears, slowing global growth and a hawkish Federal Reserve.
The sell-off started on Monday after Mr Trump threatened over the weekend to slap higher tariffs on more Chinese goods. The sudden change in tone — which came despite the administration’s repeated claims of progress — wrongfooted investors, who have enjoyed a broad and powerful equity market rally in 2019.
European and Asian markets, which closed before Trump’s Xi comments, also ended Thursday in the red. The region-wide Stoxx 600 and Frankfurt’s Xetra Dax 30 both fell 1.7 per cent while London’s FTSE 100 dropped 0.9 per cent.
China’s CSI 300 was on course for its worst week since October, down by around 8 per cent since Monday after a fall on Thursday of 1.9 per cent.
Haven assets gave up some of their gains following Mr Trump’s comments. Yield on the benchmark 10-year Treasury was down 3.2 basis points at 2.4512 per cent. It had traded as low as 2.424 per cent earlier. Yields fall as bond prices rise.
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