On Friday, the Dow Jones Industrial Average recovered more than 300 points or 1.3% after facing a grueling week of trade war tensions between the U.S. and China and recession fears.
U.S. markets edged higher after Europe and China announced plans for additional stimulus to shore up their economies amid a global trade war, according to CNN.
China’s National Development and Reform Commission said on Friday it would boost the stimulus to support its economy, stabilize its government, and give its citizens more disposable income.
Furthermore, the European Central Bank said late Thursday that the central bank would reveal several stimulus measures over the next month.
Earlier in the week, U.S. markets were weakened after The People’s Bank of China (PBOC) set the daily midpoint for yuan trading at 7.0211 per dollar, which marked the consecutive session below the level of 7 per dollar. Last week, PBOC rattled global markets after it devalued the yuan in retaliation to U.S. President Donald Trump’s additional 10% tariff on USD 300 Billion worth of Chinese goods which was supposed to be implemented on September 1st.
However, on Tuesday, U.S. Trade Representative said that the tariffs would delayed until mid-December later this year. The USTR noted that products such as cellphones, laptops and other tech devices will be subject to the postponement.
While markets recovered on the delayment news, markets got rattled once again on Wednesday after recession indicators shocked investors.
The Dow plunged by 800 points or 3.1% lower on Wednesday, marking the worst intraday so far this year, after the 10-year U.S Treasury note fell below that of the 2-year U.S. Treasury note for the first time in over a decade. The inverted yield curve is commonly seen as a recession indicator, which led investors to believe that the economy will slow down or contract within the near future.
However, on Friday, the 10-year Treasury note rose to 1.58% from around 1.51% earlier in the session.