SEVERE WX : Flood Warning View Alerts

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 7:50 AM
Updated: Apr 11, 2018 7:50 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.

Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 30901

Reported Deaths: 1964
CountyConfirmedDeaths
Marion9040531
Lake3191167
Cass15796
Allen121365
St. Joseph113234
Hendricks110365
Hamilton109291
Johnson1065102
Elkhart93827
Madison57658
Bartholomew46733
Porter46521
Clark45038
LaPorte38721
Tippecanoe3563
Jackson3531
Howard34417
Delaware34027
Hancock31527
Shelby31121
Floyd31138
Boone27935
Morgan25724
Vanderburgh2402
Decatur22131
White2128
Montgomery21114
Clinton2041
Harrison18321
Grant17820
Noble17420
Dubois1712
Greene16723
Warrick16326
Dearborn16221
Monroe15810
Henry1556
Lawrence14222
Miami1351
Vigo1357
Putnam1297
Jennings1264
Orange12222
Scott1153
Ripley1126
Franklin1068
Carroll882
Daviess8116
Steuben762
Newton7210
Wabash722
Kosciusko711
Wayne665
Marshall611
LaGrange592
Washington521
Jasper521
Fayette504
Fulton461
Rush452
Jefferson411
Jay410
Clay381
Pulaski380
Randolph373
Whitley342
Brown331
Sullivan311
Starke303
Owen301
DeKalb281
Knox240
Benton240
Crawford230
Perry230
Huntington222
Tipton221
Wells220
Switzerland190
Blackford191
Fountain172
Parke170
Posey170
Spencer141
Gibson132
Ohio130
Adams121
Warren121
Martin100
Union80
Vermillion80
Pike50
Unassigned0152
West Lafayette
Few Clouds
84° wxIcon
Hi: 88° Lo: 69°
Feels Like: 87°
Kokomo
Clear
79° wxIcon
Hi: 87° Lo: 66°
Feels Like: 82°
Rensselaer
Clear
81° wxIcon
Hi: 89° Lo: 66°
Feels Like: 82°
Fowler
Clear
81° wxIcon
Hi: 87° Lo: 66°
Feels Like: 82°
Williamsport
Scattered Clouds
74° wxIcon
Hi: 86° Lo: 68°
Feels Like: 74°
Crawfordsville
Scattered Clouds
67° wxIcon
Hi: 84° Lo: 68°
Feels Like: 67°
Frankfort
Broken Clouds
79° wxIcon
Hi: 86° Lo: 67°
Feels Like: 81°
Delphi
Scattered Clouds
80° wxIcon
Hi: 89° Lo: 68°
Feels Like: 82°
Monticello
Scattered Clouds
80° wxIcon
Hi: 91° Lo: 67°
Feels Like: 82°
Logansport
Scattered Clouds
79° wxIcon
Hi: 86° Lo: 67°
Feels Like: 81°
Warm Temperatures For Memorial Day
WLFI Radar
WLFI Temps
WLFI Planner

COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

Closings related to the prevention of the COVID-19 can be found on our Closings page.

Community Events