Home Business Markets China ‘scuttlebutt’ fuels wild ride on Wall Street

China ‘scuttlebutt’ fuels wild ride on Wall Street

Will the rally last?

After more than a week of heavy losses, a rally on the Nasdaq helped lift Wall Street higher heading into the end of the week.

Beleaguered tech giant Apple bounced on Thursday after a tumultuous last month that has wiped hundreds of billion from the company, pushing the Nasdaq up 1.72 per cent at the end of the session.

The Dow Jones gained 208 points (or 0.83 per cent) after losing more than 1000 over the last five days of trade, while the S&P 500 closed 1.06 per cent in positive territory.

CommSec Securities economist Craig James said it had been an ‘amazing ride’ as the Dow swung wildly by more than 500 points through the session, strengthened in the final hours by the suggestion that US-China trade tensions were cooling.

“US share markets are celebrating, investors are celebrating, and we’ve seen the Aussie dollar rise sharply on the back of that…on that expectation that we are going to get some progress on the US-China trade deal,” James said.

“This is the biggie, this is the last one left we have to be worried about. If we get this one ticked off, the markets will be scouring for things to worry about,” he explained.

A report claiming that the US had told China that the next tranche of its trade war tariffs had been put on hold was behind positive market sentiment.

However, after Business Breakfast spoke with James, new reports emerged that the news out of the US may not have actually been accurate.

The statement released by the US Trade Representative on speculation that the next tranche of US tariffs on China were being put on hold
The statement released by the US Trade Representative on speculation that the next tranche of US tariffs on China were being put on hold

US trade representative Robert Lighthizer denied the veracity of the news just minutes before the end of the session but it seemed too late to stop the Wall Street rally.

“It’s very hard to work out what is actually [the] truth, what’s fact from fiction,” Shaw and Partner’s Andrew Tyrell told Trading Day. 

“A lot of people grab headlines and put stories out… it’s very hard to get a gauge on it,” he said. “Some of it is just a bit of scuttlebutt.”

All eyes will now be on how markets react when they reopen. If the report is indeed incorrect and the latest tariffs are due to go ahead, will it trigger another sell-off?

Watch the Your Money livestream for rolling coverage and see below as Andrew Tyrell discusses the impact of this contentious news on markets.

Get more news, analysis and insights straight to your inbox!

By clicking subscribe, you accept our privacy policy.