US equities bounced back on Tuesday as all major indexes rose on the back of news that China confirmed tariffs will be implemented in retaliation to President Trump’s $200 billion on Chinese goods the day before. The measures from Beijing include targeting $60 billion of tariffs on US goods along with a 10% tariff on selected goods, down from the previously targeted 20% figure and take effect from September 24th.
Stocks rose as the latest development in the trade war between the US and China wasn’t as negative as the market was expecting. The leading sectors included Consumer Discretionary rising 1.27 percent with Amazon and Netflix shares rising 1.73% and 4.97%, notable movers in the sector included L Brands Inc. rising 3.97% and Charter Communications higher by 2.92%. Industrials also benefited from the news as the S&P 500 sector rose by 0.89 percent from strength in the rail road and transport companies – Union Pacific +4.67% and Norfolk Southern Corp +4.41%. The more defensive sectors were amongst the weaker performers and included Real Estate and Consumer Staples down 0.59 percent and 0.44 percent, respectively. General Mills reported earnings and disappointed as revenue estimates fell short, as such the stock fell 7.62%.
In the broader market, Fitbit shares rose 6.4 percent after the company escaped the tariffs being implemented. Apple shares also rose 0.2 percent following the news. Trade-sensitive stocks gained ground as Boeing shares ending 2.1 percent higher. The plane maker, the biggest U.S. exporter to China, led the Dow’s surge along with Caterpillar Inc. rising 2.14%. Tesla Inc. shares declined 3.4 percent after the electric car manufacturer reported that it had received a request for documents from the U.S. Department of Justice regarding Elon Musk’s public statements about taking the company private.
After-market trading saw Tilray Inc. shares reach new high 5 percent after shares soared 29 percent during the session after the announcement that the cannabis producer will be able to import marijuana to the US for medical research.
In currency markets, the dollar rose against the Japanese yen and the euro as investors discounted the trade tensions taking place in the market. Against the euro the dollar gained 0.15 percent and is currently trading at 1.1679 whilst against the yen the dollar gained 0.46 percent reaching a high of 112.39 yesterday. The Australian dollar also rose 0.53 percent and is trading at 0.7230.
Chart of the Day: Nike Inc. (NKE) Daily Chart