US markets are up Tuesday, regaining some of the lost ground following a steep sell-off in the prior session, as investors continue to deliberate over the impact of the broadening trade war between the United States and China.
But Hellwig also feels the rollercoaster of the escalating trade war has had an effect on investor psychology. The S&P 500 also saw its biggest decrease since early January.
The S&P 500 index rose 22.54 points, or 0.8%, to 2,834.41. It recovered almost a third of its loss from Monday and would now need to rise 3.9% to reach the record high it set a couple of weeks ago.
At 10:07 a.m. ET the Dow Jones Industrial Average .DJI was up 132.85 points, or 0.52%, at 25,457.84, the S&P 500 .SPX was up 15.15 points, or 0.54%, at 2,827.02 and the Nasdaq Composite .IXIC was up 39.93 points, or 0.52%, at 7,686.96.
The move comes in retaliation to the decision by President Donald Trump last week to more than double levies on $200bn worth of Chinese imports to 25%.
The move comes three days after the U.S. more than doubled tariffs on US$200bn of Chinese imports.
Tuesday's rally came after another round of morning Trump tweets about trade.
"You never really know, right?" "It feels like an attempted recovery that may not have legs". In the meantime, it appears both sides are far from a deal. -China deal will soon be brokered are helping fuel the gains, said Lukas Daalder, BlackRock's chief investment strategist for the Netherlands. "But we're looking for a path to progress".
In another sign of how nervous investors were feeling, an index known as Wall Street's "fear gauge", which measures how much volatility the market expects in the future, spiked 28.1%.
But "an accompanying "reinversion" of the Treasury yield curve suggests that the best days for USA equities may be over even if the two economies eventually resolve their dispute".
S&P 500 futures are eyeing a rise of 6 points.
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Stocks doing business in China got hit the hardest. If that in turn drives spending lower, it would lead to lower economic growth and corporate profits.
The benchmark S&P-ASX200 index closed up 44.3 points, or 0.71 per cent, to 6,284.2 points on Wednesday, while the broader All Ordinaries was up 43.7 points, or 0.69 per cent, to 6,370.9. On Monday it leaped 28.1%. Market sentiment remains very fragile. Tech firms may have the most to lose from a protracted U.S. -China trade battle because the bulk of their customers and suppliers are overseas. Meanwhile, the Russell 2000 of small-cap stocks has declined 5.7% over the past six sessions and re-entered correction territory Monday, down more than 10% from its August record.
"We're going to have to be nimble with our portfolios", said Meghan Shue, senior investment strategist at Wilmington Trust, which reduced investments in USA large-cap stocks and emerging markets and boosted cash holdings in response to Friday's tariff increase.
The yield on 10-year Treasuries rose one basis point to 2.41%. It was at 2.45% at the end of last week.
Shares of Tesla fell 5.2 per cent to their lowest in more than two years.
HOLES IN THE FABRIC: Ralph Lauren fell 8% after investors focused on a drop in revenue from the upscale clothing company's key market in North America.
In early trade London rose 0.3 per cent, Paris added 0.6 per cent and Frankfurt gained 0.2 per cent. Utilities were the only sector to rise on the stock market, and prices for USA government bonds, which are considered ultra-safe investments, rose sharply, sending yields lower.
NAB was up four cents, Westpac was down one cent and Commonwealth was down three cents. Oil retreated and gold rose.
The dollar fell to 109.34 Japanese yen from 109.90 yen on Friday.
The euro was unchanged at $1.1204.
The British pound dipped 0.4% to $1.2860, the weakest in nearly three months.