Stocks rose after the White House delayed imposing tariffs on some consumer and electronic goods imported from China that were set to go into effect on Sept. 1.
The delay, the latest twist in the on-again off-again trade war between the world’s two largest economies, pushed shares of retailers, computer-chip makers and other technology firms sharply higher. The S&P 500 index rose 1.5 percent, recovering from a 1.2 percent drop on Monday.
Investors have been unnerved recently by indications that the trade war between the United States and China was worsening quickly, so the signs of easing tension were seen as a relief.
The United States trade representative’s office said that a new 10 percent tariff on roughly half the Chinese goods exported to the United States would still take effect on Sept. 1 as announced by President Trump.
But tariffs on consumer electronics, video game consoles, certain toys, computer monitors and some footwear and clothing items will be delayed until Dec. 15, giving retailers time to stockpile the products they need for the back-to-school and holiday shopping seasons.
Financial markets have been whipsawed this month after a trade truce reached in late June seemed to fall apart when President Trump threatened to impose the new tariffs and China allowed its currency to weaken sharply. Those developments suggested the two countries were girding for a prolonged battle with profound implications for the world economy.
On Tuesday, reflecting the ripples from the conflict, Singapore slashed its annual economic growth expectations to between zero and 1 percent. Investors were also reacting to unexpected election results from Argentina, which sent that country’s stocks and currency plunging.
And new data published on Tuesday also indicated prospects for the German economy — which is heavily reliant on global trade — had worsened considerably. The ZEW indicator of economic sentiment fell 19.6 points from the month before to 44.1 points in August.
“The most recent escalation in the trade dispute between the U.S. and China, the risk of competitive devaluations and the increased likelihood of a no-deal Brexit place additional pressure on the already weak economic growth,” Achim Wambach, the president of ZEW, an economic research center, said in a statement. “This will most likely put a further strain on the development of German exports and industrial production.”
Outside the United States, stocks had drifted lower, though stocks in Europe recovered early losses as trading began on Wall Street.
Hong Kong led the losses among Asia’s biggest markets, down 1.8 percent, as antigovernment protesters swarmed the city’s busy airport for the second straight day.
Hong Kong’s Hang Seng Index ended down 2.1 percent on Tuesday.
In Japan, the Nikkei 225 index fell 1.1 percent.
China’s Shanghai Composite Index ended 0.6 percent lower, while both South Korea’s Kospi index fell 0.9 percent.
Major European indexes rose. The FTSE 100 had sunk about 0.5 percent by late morning in Britain, but recovered later in the day. Germany’s DAX and the CAC 40 also shook off morning slumps to rise in the afternoon.
SOURCE : https://www.nytimes.com/2019/08/13/business/global-markets.html