Stocks rebound from worst trading day of 2019

Stocks rose Tuesday morning after China nudged the value of its currency higher, trimming losses from the market’s worst day of 2019.

The Dow Jones Industrial Average rebounded 0.72 percent with a gain of 184 points, while the S&P 500 and Nasdaq composite opened Tuesday trading with gains of 0.9 percent and 1.32 percent each.

{mosads}Stocks bounced back in futures trading shortly after China pushed the value of its currency, the yuan, to a higher exchange rate with the U.S. dollar. The Treasury Department formally labeled China a currency manipulator Monday evening after the yuan-to-dollar exchange rate fell to a low of 7-to-1.

Beijing’s devaluation of the yuan sent stocks plummeting Monday on fears that the U.S.-China trade war would soon spiral out of control. The Dow Jones and S&P 500 sunk almost 3 percent each by Monday’s close, while the Nasdaq composite tumbled nearly 3.5 percent.

Stock futures sank sharply Monday evening after the Treasury Department labeled China a currency manipulator, prompting Beijing to stop all imports of U.S. agriculture products.

While China’s retreat on currency fixing soothed the concerns of financial market traders, the stakes of the yearlong trade war remain at all-time highs.

Trump is set to impose a 10 percent tariff on more than $300 billion in Chinese consumers goods, tech products, clothing and household supplies imported to the U.S. on Sept. 1.

The new import taxes will likely raise costs for consumers, straining household budgets as parents shop for the new school year. China’s retaliation against the aching U.S. agriculture sector is also likely to drive further losses for cash-strapped farmers.

“China’s announcement that it will not buy any agricultural products from the United States is a body blow to thousands of farmers and ranchers who are already struggling to get by,” said Zippy Duvall, president of the American Farm Bureau Federation. 

Trump sought to settle fears about the blowback of his trade war on the U.S. economy, insisting that China was in a much weaker position and would need to strike a deal soon.

“As they have learned in the last two years, 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 — And I’ll do it again next year if necessary!” Trump tweeted Tuesday.