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Dow rallies 429 points after Xi Jinping calms trade fears

Chinese President Xi Jinping gave Wall Street a lift.The Dow rallied 429 points on Tuesday after Xi said in a ...

Posted: Apr 11, 2018 7:50 AM
Updated: Apr 11, 2018 7:50 AM

Chinese President Xi Jinping gave Wall Street a lift.

The Dow rallied 429 points on Tuesday after Xi said in a speech that the Chinese government plans to "significantly lower" tariffs on imported cars as part of efforts to further open China's economy.

The S&P 500 and the Nasdaq each climbed more than 1%. Automakers helped lead the charge: GM, Ford, Honda and Tesla all gained ground.

Related: How did China end up posing as the defender of global trade?

Xi's conciliatory speech cooled trade tensions between the United States and China. Investors hope Xi's plan will convince the Trump administration to move away from protectionism.

President Trump praised Xi on Twitter on Tuesday. "We will make great progress together!" he said.

"This could provide Trump with an opportunity to back down from his tariff threats while claiming a victory of sorts," Capital Economics' Julian Evans-Pritchard wrote in a research note Tuesday.

The United States-China spat has roiled markets in recent weeks.

Related: The stock market can't figure out Trump's trade policy

Investors fear a full-scale trade war could break out between the world's two largest economies and slow global economic growth.

Trump has proposed tariffs on up to $150 billion of Chinese goods. In retaliation, China said it planned to put $50 billion in tariffs on US planes, cars and soybeans.

Trump complained as recently as Monday about China's 25% tariff on foreign cars.

"Does that sound like free or fair trade," Trump tweeted. "No, it sounds like STUPID TRADE - going on for years!"

Xi didn't mention Trump or the United States in his speech, but he stressed the need for dialogue and warned against a "Cold War mentality."

Related: Head of world's largest hedge fund 'worried' about a trade war

Although Xi said lowering tariffs on imported cars was part of "a new phase of opening up" China, the Chinese government has mentioned the plan before.

When Trump visited China in November, Chinese officials pledged to "gradually and properly" reduce tariffs on imported vehicles. They didn't give a specific time frame.

"There was little in Xi's speech that we haven't heard before," Evans-Pritchard said. "What he has done, however, is cleverly combined existing reform pledges into a single package."

Related: How a US-China trade war could hurt (and help) others

Investors will now wait to see how the administration responds.

With midterm elections approaching in the fall and Trump's Midwest farm base caught in the US-China fight, "Trump will gladly take any bone that the Chinese throw his way," said Ed Yardeni, president of Yardeni Research. Trump admitted Monday that Chinese tariffs may hurt farmers, but said "we'll make it up to them."

Related: Trump promises to 'make it up' to farmers hit by China tariffs

Legal developments also loomed over the market for the second straight day.

The Dow lost most of its gains at the end of the day Monday as news broke that the FBI had raided the office and home of Michael Cohen, Trump's personal lawyer and confidant.

Stocks recovered Tuesday.

"Everybody slept on it and recognized that wherever this leads it's not likely to have a significant economic impact," Yardeni said.

-CNN's Jethro Mullen contributed to this story.

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 751242

Reported Deaths: 13795
CountyCasesDeaths
Marion1032931788
Lake556911009
Allen41692692
St. Joseph36990565
Hamilton36588417
Elkhart29398461
Tippecanoe22901226
Vanderburgh22556400
Porter19356325
Johnson18471389
Hendricks17682317
Clark13226195
Madison13149344
Vigo12614253
LaPorte12419221
Monroe12207176
Delaware10966198
Howard10321225
Kosciusko9630121
Hancock8576146
Bartholomew8169157
Warrick7860156
Floyd7811180
Grant7242179
Wayne7162201
Boone6966103
Morgan6761141
Dubois6218118
Marshall6209116
Cass6016110
Henry5900110
Dearborn589878
Noble581488
Jackson509076
Shelby501496
Lawrence4742122
Gibson444894
Clinton442355
Harrison441875
DeKalb439885
Montgomery438090
Whitley406543
Huntington402681
Steuben400159
Miami395269
Jasper388054
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White331953
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Wells295281
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Scott270156
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Owen211858
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Jay200932
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Franklin170335
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Blackford136232
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Newton113936
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Crawford102516
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Martin91715
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Switzerland8148
Union72810
Ohio57911
Unassigned0420

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1108736

Reported Deaths: 20166
CountyCasesDeaths
Franklin1287201467
Cuyahoga1157922211
Hamilton813971250
Montgomery525481043
Summit484271001
Lucas43353820
Butler39013606
Stark33332929
Lorain25672505
Warren24591303
Mahoning22370603
Lake21207388
Clermont20117253
Delaware18852136
Licking16662222
Fairfield16574204
Trumbull16548482
Medina15610271
Greene15281248
Clark14237306
Wood13292200
Portage13251215
Allen11913239
Richland11605211
Miami10849225
Wayne9141223
Columbiana9032230
Muskingum8906135
Pickaway8663122
Tuscarawas8649250
Marion8642138
Erie8056165
Ashtabula7160179
Hancock6998132
Ross6944161
Geauga6838151
Scioto6534106
Belmont6157174
Union584549
Lawrence5731102
Jefferson5678158
Huron5546122
Sandusky5442126
Darke5420129
Seneca5348128
Washington5319109
Athens523960
Auglaize502187
Mercer487385
Shelby476895
Knox4571112
Madison444266
Ashland435797
Putnam4336103
Defiance432399
Fulton432074
Crawford4037110
Brown402461
Logan387677
Preble3855105
Clinton379166
Ottawa373681
Highland359665
Williams348278
Champaign344759
Guernsey324953
Jackson318254
Perry297350
Morrow291840
Fayette285450
Hardin275265
Henry273467
Holmes2701101
Coshocton269060
Van Wert247264
Adams243256
Pike242835
Gallia240650
Wyandot234556
Hocking220563
Carroll197348
Paulding176542
Meigs148440
Monroe136344
Noble136239
Harrison114138
Morgan109624
Vinton85517
Unassigned03
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