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US: Wall Street brushes off trade jitters as stocks rebound
[NEW YORK] US stocks rebounded on Monday as Wall Street cast off worries about a looming trade war to help the Dow Jones Industrial Average break a four-day losing streak.
All three major indices rose, with investors seemingly persuaded President Donald Trump's recent threats to launch a trade war were actually a bargaining tactic.
The president on Monday indicated he might consider exempting Canada and Mexico from global steel and aluminum tariffs if he likes the outcome of pending trade talks.
The Dow Jones Industrial Average gained 1.4 per cent to close at 24,874.76 while the broader S&P 500 added 1.1 per cent, settling at 2,720.94.
The tech-heavy Nasdaq also added a full percentage point to finish at 7,330.70.
"Most investors do not believe the president will go through with such a strict and onerous plan," Sam Stovall of CFRA told AFP.
Mr Trump appeared to leave open the possibility of sparing Mexico and Canada from the full brunt of the tariffs, but said he would not "back down" unless the countries negotiate a new "fair" North American Free Trade Agreement (Nafta).
The latest round of Nafta talks concluded Monday in Mexico City with officials not much closer to a deal.
"More than anything, there is a contemplation over whether the war in tariffs is a tactic to get a better deal on Nafta," said Art Hogan of Wunderlich Securities. "We'll know more this week."
But Mr Trump has vowed to go ahead with the tariffs of 25 per cent on steel and 10 per cent on aluminium, as well as threatening retaliation against any country that reacts, including slapping duties on European car imports.
Stocks that had been most battered by Mr Trump's tariff threats posted strong gains Monday, with equipment maker Caterpillar leading the Dow's gainers with a 3.2 per cent jump. Boeing, heavily dependent on aluminum, also added 2.3 per cent.
A strong report on the services economy, which remains near record levels according to an industry survey released Monday, also provided some cheer.
Major tech stocks had healthy bumps, with Twitter jumping nearly five percent while Facebook gained 2.1 per cent and Google-parent Alphabet added one per cent.