By HVY Journalists: The Dow looks poised to record another triple-digit gain on Tuesday after a top Trump advisor teased that the simmering US-China trade war would inevitably end in negotiation. Barring an unexpected reversal, the stock market bellwether should easily extend its winning streak to seven.
Dow Speeds Toward Seventh Straight Gain
All of Wall Street’s major indices sped toward considerable gains. As of 9:50 am ET, the Dow Jones Industrial Average had climbed 127.72 points or 0.49%; the DJIA last traded at 26,190.4.
The S&P 500 rose 16.11 points or 0.56% to clear the 2,900 threshold, and the Nasdaq jumped 53.27 points or 0.68% to 7,876.44.
Wilbur Ross: Don’t Get Hysterical; Trump & Chian Will Make a Deal
Wall Street rabidly bid up stock valuations for a seventh straight day after one of Trump’s top advisors assured investors that the US-China trade war would be a temporary bump in the market’s decade-long bull run.
“Eventually, this will end in negotiation,” Commerce Secretary Wilbur Ross said on CNBC on Tuesday. “Even shooting wars end in negotiations.”
Ross admonished investors for their “trigger happy” reactions to President Trump’s tariff threats, noting that “people were getting hysterical” after Trump threatened to tax all Mexican imports. Those tariffs did not go into effect after Trump and Mexico struck a deal at the 11th hour.
Ross said that Trump’s tariff strategy was a win-win for the United States. Either the tariffs would pressure China to make a deal, or they would enrich the US.
“Either we will collect more and more tariffs on more and more products or we’ll back an arrangement with them,” he said.
Many economists disagree with this assessment of tariffs, warning that it is US consumers and investors – not foreign governments – that pay the price for import duties. In fact, Deutsche Bank estimates that Trump’s trade wars have already cost the stock market an unbelievable $5 trillion in lost growth.
Dow Targets New All-Time High
Even so, Ross’ confident assessment that the US and China will settle their differences at the negotiating table provides the Dow with a much-needed bullish catalyst as it seeks to close at a new all-time high for the first time since October 2018.
Since bottoming at an intraday low of 24,680.57 on June 3, the Dow has surged nearly 1,400 points. The DJIA now sits less than 800 points below the all-time high of 26,828.39 it set last October.