Stocks erase losses as worries over China tensions fizzle
By AP News | May 31st 2020
Stocks closed out a solid week on Wall Street Friday with a late-afternoon rebound after worries that President Donald Trump would reignite a costly trade war with China faded.
The benchmark S&P 500 index rose 0.5 per cent, recovering from a one per cent slide after Trump outlined several actions in response to a move by China to exert more control over Hong Kong but steered clear of upending a trade pact struck with Beijing earlier this year. The S&P 500 ended the month 4.5 per cent higher, its second monthly gain in a row. The world’s two largest economies agreed to a Phase 1 trade deal in January after more than a year of talks and billions of dollars in tariffs imposed on each other’s imports.
Worries that the Trump administration would pull out of the deal with the world’s second-largest economy weighed on the market for much of the day, until the president’s mid-afternoon statement.
“Much ado about nothing,” Sam Stovall, chief investment strategist at CFRA, said of the remarks. “The immediate concern, meaning the cessation of the Phase 1 (trade) accord, did not end up being put on the table, much to traders’ relief.”
Technology and health care stocks accounted for much of the market’s gains. That helped offset losses in banks, industrial companies and elsewhere. Bond yields fell and gold prices rose, signs investors remain cautious.
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