This comeback comes after the recent developments in the U.S. – China trade situation
The S&P 500 made a recovery of sorts by erasing the early losses it incurred on Friday, the index has bee suffering losses all through the week due to the rocky nature of trade relations between the United States and China.
The fact that the U.S. Treasury Secretary Steven Mnuchin came out and said that the trade talks that were taking place right now were constructive and looked to move in a positive direction is the only thing that helped the index recover some of what it had lost this week.
The index is however still on its way to having its worst weekly percentage loss since December 2018. After the index fell after 1.6% the statements from Mnuchin helped the benchmark stock index rebound to a certain extent.
The stocks had also taken a beating earlier this week when President Trump said that he was in no hurry to sign a deal after the higher tariffs on the $200 billion worth of Chinese goods went into effect.
The U.S. stocks have been disturbed to a great extent off late and have been fluctuating with every shift in the bricks when it came to the U.S. – China trade relations.
The stocks have been in a state of turmoil this week particularly after the imposition of the additional tariffs on Chinese goods as promised by the Whitehouse.
The recent developments between the two companies, i.e. the trade talks that they are now engaged in has forced investors into taking precautionary measures and bracing for an extension of the politically charged dispute in case of any kind of escalation between the two biggest economies of the world.
The situation could very well mean a global economic slowdown if it deteriorates further and the world will find only one man to blame, the President.
The investors are beginning to act out of caution and are choosing to invest in assets with lower risk aspects, such as government bonds. The S&P 500 has fallen a solid 2.5%for the week as a result of this.
Other markets like the NASDAQ Index and the Dow futures have not been spared either, the primary concern of the world is if the U.S. and Chinese delegations can come to some kind of a middle ground that will not leave the economy in shambles and investors running in circles trying to cut back on their losses.