Stocks headed cautiously higher Tuesday morning following a temporary reprieve on restrictions on U.S. exports to China telecom giant Huawei Technologies, reflecting a slight reduction in one front of the Sino-American tariff war.
The Dow Jones Industrial Average DJIA, +0.52% rose 134 points, or 0.5%, to 25,811, while the S&P 500 index SPX, +0.63% gained 18 points, or 0.7%, to 2,859. The Nasdaq Composite Index COMP, +0.82% gained 64 points, or 0.8%, to 7,767.
Some calm appeared to be returning to markets, after Monday’s technology-led losses. Shares of chip makers bore the brunt of declines after technology companies in the U.S. and elsewhere said they have started to comply with the White House’s ban on China’s Huawei Technologies Inc.
U.S. officials said late Monday they would offer some temporary exceptions to an export blacklist against Huawei Technologies Co., which will provide some suppliers and customers of China’s telecom giant a 90-day reprieve from tough trade penalties—a move that appeared to soothe investor anxiety somewhat.
However, the rhetoric didn’t let up on Tuesday as the chief executive of Huawei, Ren Zhengfei, fired back against the blacklist for his company, saying the U.S. government is underestimating how powerful his company will be in the 5G space in a few years. He also said the company has been stockpiling chips, and, therefore, is well prepared for that ban.
Meanwhile, nearly 200 American footwear companies, including Nike Inc. and Under Armour Inc. wrote a letter to U.S. President Donald Trump, asking him to remove proposed tariffs on imported shoes from China. The companies said it would be “catastrophic” for consumers, corporations and the U.S. economy.
The macroeconomic calendar didn't offer relevant data so far today, although the EU Commission will shortly publish May preliminary Consumer Confidence, seen improving modestly to -7.6 vs. the previous -7.9. Ahead of it, the US will publish April Existing Home Sales, seen rising by 2.7% after falling 4.9% in March, while a couple of Fed speakers will hit the wires in the American afternoon.
Nathan Lambert, Head of Global FX Analytical Department