Dow Futures Rocket on Bombshell Bloomberg Trade Deal Report

  • Dow Jones Industrial Average (DJIA) futures popped 141 points higher on Wednesday.
  • Bloomberg report reveals that Trump and China are close to agreement on rolling back tariffs.
  • Traders back in risk-on mood after two days of vicious selling on the US stock market.

Dow futures contracts roared back to life in premarket trading Wednesday, pointing to a strong stock market open. It comes after a breaking Bloomberg report revealed that China and the US were moving closer to an agreement on tariff rollbacks.

The U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase-one trade deal despite tensions over Hong Kong and Xinjiang, people familiar with the talks said.

The news comes as a relief to traders after two days of heavy selling pressure which saw the Dow shed as much as 450 points in a matter of hours yesterday.

Dow futures jump 141 points

DJIA futures jumped 141 points on Wednesday morning before settling slightly lower at 5.19 am ET. S&P 500 futures were up 0.34% while Nasdaq Composite futures traded 0.52% higher. Bitcoin traded at $7,199.

Dow Jones Industrial Average (DJIA) futures rocketed 114 points on bombshell Bloomberg report. Source: Yahoo Finance

US-China close to agreeing tariffs on phase one trade deal

Rolling back Trump’s tariffs on $550 billion on Chinese exports has been a sticking point in the ongoing trade negotiations. While China sees a rollback as necessary part of any agreement, the Trump administration feels otherwise. Earlier in November, Trump confirmed:

They’d like to have a rollback… not a complete rollback because they know I won’t do it.

Today’s Bloomberg report claims that progress is still ongoing and a compromise may be close. Despite that, many roadblocks remain. The US has angered China in the last week by signing laws that cracks down on human rights issues in Hong Kong and Xinjiang where one million muslims are held in re-education camps.

Dow rocked by confusing trade deal messages

The news will come as something of a surprise to traders. Yesterday Trump rocked the markets by hinting at a delayed deal. Speaking to reporters while visiting the UK, he said he may wait until after the 2020 election to conduce the trade deal with China.

[youtube https://www.youtube.com/watch?v=0Q_Wiv5O2fg?feature=oembed&w=1200&h=675]

Commerce Secretary Wilbur Ross doubled down on the message, claiming that postponing the deal would give the president a stronger position from which to leverage a deal.

The flip-flop messaging from the White House has brought intense volatility to the stock market. And it hasn’t gone un-noticed by Chinese press. Global Times editor Hu Xiin said this morning:

I predict there is a high probability that President Trump or a senior US official will openly say in a few hours that China-US trade talks have made a big progress in order to pump up the US stock markets. They’ve been doing this a lot.

His prediction couldn’t have been more accurate.

This article was edited by Samburaj Das.

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