- US stocks recovered on Tuesday from their worst day of 2019 after China’s central bank moved to stabilize its currency overnight.
- Major US indexes tanked on Monday after China retaliated against President Trump’s new tariffs by allowing the value of the yuan to slip below 7 yuan-per-US dollar, a key psychological level.
- China raised the yuan’s official reference point back above that threshold Tuesday, and said it has no intention of lowering the value of its currency in order to be competitive.
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Stocks rebounded from their worst day of the year on Tuesday amid easing trade-war fears. The relief came after China’s central bank took steps to bring its currency back above a key psychological threshold against the US dollar.
China let the value of the yuan slip below 7 yuan-per-US dollar on Monday, which sent major US indexes plunging as much as 3% on escalated trade-war fears. President Trump accused China of improperly influencing its currency, and the US Treasury Department officially declared China a currency manipulator on Tuesday.
The People’s Bank of China quickly moved to raise the yuan’s reference point above the key level and said it wouldn’t lower the value of its currency in order to be competitive, which sparked a rally in US stocks that recouped some losses from Monday’s sell-off.
Here’s a look at the major indexes as of 4 p.m. close:
- The S&P 500 rose 1.30%, to 2,881.77.
- The Dow Jones Industrial Average increased 1.21%, to 26,029.52.
- The Nasdaq Composite rose 1.39% to 7,833.27.
The president also suggested in a tweet on Tuesday that the US could remain locked in a trade war with China into 2020 after the country abandoned its agreement to purchase more American farm products.
"Our great American Farmers know that China will not be able to hurt them in that their President has stood with them and done what no other president would do," Trump wrote in his tweet. "And I’ll do it again next year if necessary!"
Within the S&P 500, these were the largest gainers:
And the largest decliners:
Take-Two Interactive climbed 8% on Tuesday after reporting stronger-than-expected second quarter earnings that were boosted by the continued popularity of the Grand Theft Auto franchise. The game developer rebounded from a dip in video game stocks brought on President Trump comments which linked violent video games to mass shootings.
Shares of Aurora Cannabis jumped as much as 16% after the weed producer announced it expects revenue in the fourth quarter of 2019 to be between C$100 million and C$107 million, compared to C$19.1 million last year.
The S&P 500’s tech index, which took the biggest hit on Monday due to big tech company’s exposure to China, rose 1.6%. The financials sector followed with gains of 1.5%. Energy posted the only losses, dropping 0.1%.
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