Stocks whipsawed following news of a US-China trade deal
Posted December 13, 2019 9:48 a.m. EST
Updated December 13, 2019 10:54 a.m. EST
CNN — Stocks were flat Friday after Chinese officials said that a phase one deal had been reached with the United States that would avert an escalation of the trade war and higher tariffs that were set to kick in on Sunday. President Trump confirmed the news in a series of tweets.
It was a choppy day of trading though, with stocks powering ahead shortly after the open before pulling back after all the news was released.
The Dow initially rose more than 150 points and hit a new intraday all-time high in the process before pulling back to more modest gains That followed a more than 220 point jump Thursday on reports that a tentative trade agreement had been reached.
China's Commerce Ministry held a press conference Friday to discuss the progress in the trade talks. President Trump then took to Twitter to declare that "a very large Phase One Deal with China" had been reached.
"They have agreed to many structural changes and massive purchases of Agricultural Product, Energy, and Manufactured Goods," the president tweeted. He added that existing tariffs will remain in place though, but that the "penalty tariffs" will not be imposed.
"We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election," Trump concluded.
Trump's tweets about the deal came shortly after he appeared to throw cold water on the reports of a trade truce by tweeting earlier Friday that a story in "The Wall Street Journal" about rolling back tariffs was "completely wrong."
The S&P 500 and Nasdaq were both flat in mid-morning trading, one day after both indexes closed at fresh record highs.
Stocks are still on track to have a winning week as optimism that a deal to avoid the December 15 deadline for higher tariffs would be reached have lifted the sentiment on Wall Street.
Investors seemed to brush off a report from the US government Friday morning that showed a smaller jump in retail sales than expected in November as consumers were gearing up to shop for the holidays.
Adding to the optimism? The resounding win for British Prime Minister Boris Johnson's Conservative Party in the United Kingdom's general election Thursday clears up some lingering doubts about Brexit.
The UK is now firmly on track to officially leave the European Union by the end of January. Stocks in the UK rallied on the news, as did the British pound.