Futures had been wavering between positive and negative territory on Thursday evening following news that trade talks between the U.S. and China would continue on Friday — implying no deal had been struck before the midnight deadline for increased tariffs.
Chinese Vice Premier Liu He met with top U.S. trade officials Thursday evening in Washington, just hours before the new tariffs were to go into effect. President Donald Trump had set a 12:01 ET Friday deadline to slap higher tariffs — from 10% to 25% — on $ 200 billion worth of Chinese goods. Trump later suggested that the White House could reverse that decision, based on progress in negotiations.
Hours before the meeting Thursday, the president said tariffs are an “excellent” alternative to a trade deal with China.
Stocks extended this week’s major sell-off on Thursday. The Dow Jones Industrial Average has fallen more than 650 points this week, while the S&P 500 has lost about 2.5% following the president’s Sunday tweet threatening tariff hikes.
On Monday, stocks shook off the president’s weekend tweet as a mere negotiation tactic. But tougher rhetoric by top U.S. trade representative Robert Lighthizer weighed on major indexes.
Markets again seesawed after the president said it was possible to get a trade deal with China this week. The Dow fell nearly 450 points at its intraday low on Thursday before cutting losses and ending the day just 138 points down.
The Cboe Volatility Index, a measure of the 30-day implied volatility of the S&P 500 that’s commonly known as Wall Street’s “fear gauge,” hit its highest level since Jan. 4 on Thursday.