Never miss a story from Rich Dvorak

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Rich Dvorak

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

Talking Points:

  • US stocks jump then dump on conflicting trade war headlines
  • White House reported to consider scaling back trade tariffs on China only to be negated by statement from Treasury Department spokesperson
  • Frequency of jawboning headlines has increased, but a Trump executive decision could still happen at any time

The US stock market just experienced a roller coaster ride in afternoon trading as conflicting headlines regarding tariffs and the US-China Trade Warcame across the wires from the Wall Street Journal and CNBC. Just as the S&P500 began to pull back from a heavy resistance at the 2,625 level that formed a triple top, news spread that the White House is considering rolling back tariffs on China. Stocks immediately jumped on the news and quickly reached fresh intraday highs well above prior resistance.

Shortly after, however, CNBC received report from the Treasury Department spokesperson that “Neither Secretary Mnuchin nor Ambassador Lighthizer have made any recommendations to anyone with respect to tariffs” which caused stocks to erase nearly all of the short-lived gains.

US S&P500 INDEX PRICE CHART: 1-MINUTE TIMEFRAME (INTRADAY JANUARY 17, 2019) (CHART 1)

SPX S&P500 Index Price Chart Trade War Comments January 17, 2019

This is not the first time the markets have seen positive trade war headlines, especially as of late. Just last week there was similar speculation that the White House was contemplating decelerating its trade war with China that helped bolster investor hopes of a deal coming soon.

While the Treasury Spokesperson denies that a formal recommendation was made to the White House, President Trump could act unilaterally without a recommendation from Mnuchin or Lighthizer – and America’s Chief Executive has not shied away from doing so. Although, investors should still be wary of jawboning remarks like these that bolsters sentiment and stocks despite not carrying any fundamental substance (yet).

---

Written by Rich Dvorak, Junior Analyst for DailyFX

Follow on Twitter @RichDvorakFX

Check out our Education Center for more information on Currency Forecasts and Trading Guides.