The global markets took Washington’s decision to impose tariffs on Chinese imports mostly in their stride yesterday, even as Beijing retaliated by imposing its own tariffs of between 5 and 10% on $60bn of US imports.
China said the US’s decision undermined attempts between the two countries to broker a trade settlement, while President Trump promised to increase tariffs to 25% in 2019 if no deal could be struck.
Technology and energy stocks rallied to help the S&P 500 recover, putting it within touching distance of its record August close.
While a late rally for the dollar made up for its lack of movement earlier in the day, sterling hit a 7-week high before retreating ahead of a meeting of EU leaders in Salzburg that is expected to mark a turning point in Brexit negotiations.
The price of oil also rallied as Saudi Arabia said they were comfortable with Brent Crude at the $80 per barrel mark.