US and China agree to roll back trade tariffs

U.S. and European stock futures jumped as America and China agreed to proportionally roll back tariffs on each other’s goods.

Havens including Treasuries and the yen slipped.

Contracts on the S&P 500 climbed after a Chinese Ministry of Commerce spokesman said the economic superpowers had agreed to roll back tariffs in phases, potentially providing a road-map to a deal to end the trade war. Equities in Japan closed with marginal gains, while shares in Hong Kong rebounded after the news.

Earlier in the session, traders had focused on signs that a preliminary trade agreement may not happen this month as the two sides were wrangling over a location. Oil was around $57 a barrel in New York.

Mounting hopes of a U.S.-China trade deal have buoyed confidence in markets this month just as key economic indicators showed signs of stabilization. While the latest data from Europe suggest a robust recovery may not be on the cards, a relative improvement eased fears that the global economy was hurtling toward a recession.

“We’re still waiting to see what sticks” on any deal, Patrick Chovanec, chief strategist at Silvercrest Asset Management, told Bloomberg TV. “Investors should be patient and not leap to any conclusions based on today’s or yesterday’s headlines.”

Elsewhere, oil rebounded on the China news, shrugging off a report that the biggest producers in OPEC+ aren’t pushing for deeper oil-supply cuts at meetings next month.

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US and China agree to roll back trade tariffs