Don't mention the trade war: Wall St rebounds led by tech stocks
US stocks edged higher yesterday, as investors picked up beaten-down technology and industrial stocks following optimistic comments from Washington and Beijing that tempered concerns about a further escalation in the trade war.
The S&P 500 and the Dow recorded their largest percentage drops since January 3 on Monday in one of Wall Street’s worst sell-offs this year after China hit back with tariffs on $60bn of US goods.
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US President Donald Trump said on Monday he would talk to Chinese President Xi Jinping at a G20 Summit in late June and China said both sides have agreed to keep the talks going, helping inject some calm into the markets.
“Investors are trying to scoop up bargains. Maybe things have gotten a little bit too far overdone to the downside,” said Robert Pavlik, chief investment strategist at SlateStone Wealth in New York. “As long as the two sides are talking, the tariffs itself become background noise.”
Technology shares, which posted their biggest percentage drop in more than four months in the previous session rose 0.92pc and boosted markets. The sector was lifted by shares of iPhone maker Apple, Microsoft Corp and chipmakers, all of which took a hard hit on Monday as they rely on China for a large part of their revenue.
Prospects of the global economy being derailed by a trade war knocked more than 4pc off the S&P 500 index since it hit an all-time high on May 1, but there was a recovery yesterday as nine of 11 major S&P sectors were higher, led by energy.
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