U.S. markets and stock exchange traded funds rebounded on hopes that the U.S. may move back to the negotiation table with China after President Donald Trump predicted an end to the prolonged trade war.
On Friday, the Invesco QQQ Trust (NASDAQ: QQQ) gained 0.1%, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) increased 0.4% and SPDR S&P 500 ETF (NYSEArca: SPY) rose 0.3%.
Trump said Thursday that Huawei Technologies Co could be included in a trade deal while simultaneously warning that the Chinese telecommunications giant is “very dangerous” Reuters reports. It should be noted, though, that no high-level talks have been scheduled.
“The markets seem to be struggling to hold on to gains right now because people don’t want to be too long heading into the holiday weekend,” Marc Pfeffer, chief investment strategist at CLS Investments, told Reuters.
Mark Haefele, chief investment officer in UBS’s Global Wealth Management division, pointed out that the U.S. is among the least dependent on international trade in the world, so the White House is less inclined to buckle under trade pressures, the Wall Street Journal reports.
“When it serves his interest, President Trump takes tariffs off as quickly as he puts them on, so things can change quickly,” Haefele told the WSJ.” But we don’t see the U.S. or China hurrying to reach a deal, and the risk of miscalculation is growing.”
Trade remains the ongoing focus on traders’ minds, trumping recent data of a slowing broader economy with U.S.-made capital goods falling more than expected in April.
“The positive trade narrative has trumped data today,” Mike Dowdall, investment strategist for BMO Global Asset Management, told Reuters.
Despite the rebound on Friday, all major U.S. benchmarks were on pace for weekly declines, along with steep monthly losses, following the escalating trade tiff between the U.S. and China.
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