You didn’t really expect that to last, did you?
Stocks tanked on Monday after China imposed tariffs on 128 U.S. products in response to President Trump’s slapping tariffs on products China exports to the U.S. But they mounted a three-day rally as “wise” market sages dismissed it as just posturing ahead of negotiations that would certainly result in something much milder.
Larry Kudlow, the new head of the president’s National Economic Council, tried to reassure everyone by saying, “This is not a trade war.” That was good enough for big investors who think Kudlow is one of them and want to believe he has some sway over the president.
But on Friday President Trump indicated he might put tariffs on an additional $100 billion in imports from China. A spokesman for China’s Commerce Ministry said China “will not hesitate to immediately make a fierce counter-strike.”
So much for the rally—and the non-trade war. By mid-afternoon Friday the Dow Jones Industrial Average had lost more than 600 points and it and the Standard & Poor’s 500 were near Monday’s lows, which marked their post-correction bottom.
It was a shame, because the March jobs report, released Friday, painted a very rosy picture for investors.