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Dow flips back and forth as Wall Street remains uncertain about trade

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CNN's Christine Romans has the day's top business headlines before the opening bell on Wednesday, May 8.

Posted: May 8, 2019 11:31 AM
Updated: May 8, 2019 1:47 PM

US stocks are all over the place Wednesday.

Uncertainty over US-China trade led stocks up and down in a rocky trading session. Stocks turned green, with the Dow gaining more than 100 points at one point, after White House Press Secretary Sarah Sanders told reporters that China had informed the administration that the country wants to make a trade deal with the US.

But reports that China is considering countermeasures to the US tariff move knocked stocks off their highs again.

The Dow was last up 0.2%, or roughly 50 points. The S&P 500 and Nasdaq were both up 0.1%.

Just before Wednesday's market open, President Donald Trump tweeted that China's Vice Premier Liu He was coming to the United States to 'make a deal'. Stock futures bounced higher on the tweet.

Liu's scheduled trip to the United States had been a glimmer of hope for investors this week, suggesting that trade negotiations could still advance to avoid a fully fledged trade war between the world's two largest economies.

Trade concerns led stocks sharply lower Tuesday. It was the worst day for US stocks since January 3, when Apple announced it wouldn't meet its earnings forecast due to lower iPhone sales in China. The Dow fell more than 600 points at one point and slipped below 26,000 points for the first time since March 29. The Nasdaq dropped below 8,000 points for the first time since April 18.

Shares in the technology and industrials sector have been hit particularly hard this week, because of the industries' inherent global nature. Companies rely on global trade for materials, parts and to sell to their end markets.

European stocks were mixed on Wednesday, with all major indexes turning higher after Trump's tweet. Asian markets closed broadly lower, with China's Shanghai Composite Index finished down 1.1%.

This week's global selloff in stocks came after the United States made new threats to impose additional tariffs on Chinese imports. That led investors to believe that a market-positive outcome from the trade talks between the US and China was further off than previously believed — and might not lead to a deal at all.

On Sunday, President Donald Trump tweeted that existing tariffs on Chinese goods could be upped to 25% from 10% currently. Treasury secretary Steven Mnuchin and US trade representative Robert Lighthizer confirmed that higher tariffs would be possible by Friday in comments late Monday.

The global stock market declines inspired comparisons of the last big stocks selloff in December. Then, the market was still pricing in more risk of a slowdown in global and perhaps also US growth. But the US economy is chugging along nicely, as the 3.2% first quarter GDP growth proved.

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