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Dow rallies 429 points after Xi Jinping calms trade fears

Chinese President Xi Jinping gave Wall Street a lift.The Dow rallied 429 points on Tuesday after Xi said in a ...

Posted: Apr 11, 2018 6:50 AM
Updated: Apr 11, 2018 6:50 AM

Chinese President Xi Jinping gave Wall Street a lift.

The Dow rallied 429 points on Tuesday after Xi said in a speech that the Chinese government plans to "significantly lower" tariffs on imported cars as part of efforts to further open China's economy.

The S&P 500 and the Nasdaq each climbed more than 1%. Automakers helped lead the charge: GM, Ford, Honda and Tesla all gained ground.

Related: How did China end up posing as the defender of global trade?

Xi's conciliatory speech cooled trade tensions between the United States and China. Investors hope Xi's plan will convince the Trump administration to move away from protectionism.

President Trump praised Xi on Twitter on Tuesday. "We will make great progress together!" he said.

"This could provide Trump with an opportunity to back down from his tariff threats while claiming a victory of sorts," Capital Economics' Julian Evans-Pritchard wrote in a research note Tuesday.

The United States-China spat has roiled markets in recent weeks.

Related: The stock market can't figure out Trump's trade policy

Investors fear a full-scale trade war could break out between the world's two largest economies and slow global economic growth.

Trump has proposed tariffs on up to $150 billion of Chinese goods. In retaliation, China said it planned to put $50 billion in tariffs on US planes, cars and soybeans.

Trump complained as recently as Monday about China's 25% tariff on foreign cars.

"Does that sound like free or fair trade," Trump tweeted. "No, it sounds like STUPID TRADE - going on for years!"

Xi didn't mention Trump or the United States in his speech, but he stressed the need for dialogue and warned against a "Cold War mentality."

Related: Head of world's largest hedge fund 'worried' about a trade war

Although Xi said lowering tariffs on imported cars was part of "a new phase of opening up" China, the Chinese government has mentioned the plan before.

When Trump visited China in November, Chinese officials pledged to "gradually and properly" reduce tariffs on imported vehicles. They didn't give a specific time frame.

"There was little in Xi's speech that we haven't heard before," Evans-Pritchard said. "What he has done, however, is cleverly combined existing reform pledges into a single package."

Related: How a US-China trade war could hurt (and help) others

Investors will now wait to see how the administration responds.

With midterm elections approaching in the fall and Trump's Midwest farm base caught in the US-China fight, "Trump will gladly take any bone that the Chinese throw his way," said Ed Yardeni, president of Yardeni Research. Trump admitted Monday that Chinese tariffs may hurt farmers, but said "we'll make it up to them."

Related: Trump promises to 'make it up' to farmers hit by China tariffs

Legal developments also loomed over the market for the second straight day.

The Dow lost most of its gains at the end of the day Monday as news broke that the FBI had raided the office and home of Michael Cohen, Trump's personal lawyer and confidant.

Stocks recovered Tuesday.

"Everybody slept on it and recognized that wherever this leads it's not likely to have a significant economic impact," Yardeni said.

-CNN's Jethro Mullen contributed to this story.

Mississippi Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 94021

Reported Deaths: 2846
CountyConfirmedDeaths
Hinds7017157
DeSoto544859
Harrison378073
Jackson341869
Madison321886
Rankin320276
Lee263368
Jones243878
Forrest240971
Washington218671
Lafayette211639
Lauderdale2015124
Bolivar179765
Oktibbeha175950
Lamar163934
Neshoba1548104
Panola144927
Sunflower142945
Lowndes141257
Warren138250
Leflore137781
Pontotoc124116
Pike121749
Monroe119966
Scott116825
Copiah116433
Coahoma113627
Holmes109458
Marshall108015
Lincoln107353
Grenada106835
Yazoo104130
Simpson101544
Union98324
Tate95837
Leake94138
Adams92236
Wayne87721
Pearl River86952
Marion84234
Prentiss82617
Covington80822
Itawamba78021
Alcorn77611
Tallahatchie76221
Newton76123
George75513
Winston73119
Tishomingo66537
Chickasaw66224
Tippah65017
Attala64325
Walthall59525
Clay58217
Hancock56921
Clarke56342
Jasper55915
Noxubee54515
Smith52614
Calhoun50712
Tunica48113
Montgomery45821
Claiborne45616
Lawrence42712
Yalobusha41914
Perry41318
Quitman3755
Humphreys37415
Stone36012
Greene35417
Webster33213
Jefferson Davis32911
Amite31410
Carroll31412
Wilkinson30118
Kemper28615
Sharkey26313
Jefferson2439
Benton2232
Franklin1913
Choctaw1806
Issaquena1033
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Alabama Coronavirus Cases

Confirmed Cases: 132452

Reported Deaths: 2335
CountyConfirmedDeaths
Jefferson19230342
Mobile13192291
Montgomery8711175
Madison767475
Tuscaloosa7355114
Lee576560
Shelby576550
Baldwin512449
Marshall388943
Calhoun339040
Etowah338447
Morgan322626
Houston275322
Elmore258647
DeKalb237519
St. Clair225535
Walker225080
Talladega209927
Limestone202119
Cullman186819
Dallas176226
Franklin174828
Russell17302
Autauga171425
Lauderdale166233
Colbert162126
Blount157314
Escambia157325
Jackson152711
Chilton151328
Dale134143
Covington133427
Coffee12898
Pike11729
Chambers114042
Tallapoosa113984
Clarke106317
Marion95228
Butler91138
Barbour8487
Winston71812
Marengo70219
Lowndes65127
Pickens63914
Bibb63510
Randolph62413
Hale61628
Lawrence60320
Bullock59314
Geneva5844
Monroe5798
Cherokee57516
Clay5537
Washington54913
Perry5396
Conecuh53011
Wilcox53011
Crenshaw52532
Henry4805
Macon47920
Fayette4299
Sumter42319
Lamar3552
Choctaw34612
Cleburne3346
Greene30215
Coosa1673
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