According to several reports, the U.S. and China are making progress on establishing a trade deal between the two major economies and analysts suggest that a potential trade agreement could have an immense impact on the stock market.
Following up on China’s suspension of tariffs on U.S. car exports, the U.S. government has increased the accessibility to China’s markets while the Chinese authorities have eased policies on imports of U.S. products.
Dow & Wider Stock Market Already Recovering
Since January 3, the Dow Jones Industrial Average has recovered from 22,685 points to 23,925 points, by more than 5.4 percent. The Nasdaq Composite, which represents some of the largest technology stocks in the U.S. market including Amazon and Apple, rebounded from 6,462 points to 6,960 points, by 7.7 percent.
Many analysts have said over the past week that both countries are in agreeance on the necessity of a trade deal and are desperate to establish a comprehensive trade deal to minimize the damage on the economy and stock market of the U.S. and China.
On January 9, a Chinese foreign ministry spokesman said that the trade talks between China and the U.S. have concluded and China is expected to release the results on the discussions soon.
The Chinese Academy of Social Sciences researcher Lu Xiang told FT that the U.S. may be satisfied with China’s decision to purchase more goods from the U.S., but the country is unlikely to compromise on industrial policy.
Maybe the US just realised that it’s a good offer now. The US seems to realise that the damage trade war causes is unbearable.