Here's why the stock market isn't crashing and making a comeback after Trump's trade threat

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President Donald Trump's threats to slap more tariffs on China are being viewed as a bargaining tactic, and analysts say the most likely outcome is still a deal over all-out trade war.

were down more than 1% before recovering, in the biggest opening gap lower since Jan. 2, according to Bespoke. Much of the 17% gain in the S&P this year has been credited to optimism about trade talks and also an easy Federal Reserve.

"The President's negotiating tactics may be unconventional but the likelihood of some kind of deal is still higher than nothing getting done," writes Tobias Levkovich, chief U.S. equity strategist at Citigroup. Levkovich said it is not unlike the bumpy progress in the U.S. trade negotiations with Mexico and Canada, which have concluded in a deal that remains unratified by Congress.

Stocks that got hit the most were trade-sensitive tech names like the semiconductor stocks and Apple and industrial stocks like Caterpillar and Deere. A number of economists still see a deal being reached, but Bank of America economists in Hong Kong warned there could be an impasse because there is not the urgency to reach an agreement now that both see better economic growth and better market performance.

 

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Because the markets understand the tweets are only meant for the big part of his his base in the rust belt who don't read the real news.

Does the fact that Trump has repeatedly shown he has no idea how tariffs work put us at a major disadvantage because the Chinese realize they’re negotiating with an idiot? The ups and downs related to talk progress are starting to look like pure market manipulation by Trump et al

You folks need to learn some more about “face”.

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