(CNN Money) — Wall Street’s trade war fears are easing — for now.
The Dow climbed 400 points Monday after its worst week in two years. The Nasdaq jumped 2% and the S&P 500 gained 1.6%.
The Wall Street Journal reported late Sunday that the United States and China started quietly negotiating to expand US companies’ access to Chinese markets. The Journal reported that Treasury Secretary Steven Mnuchin was weighing a trip to Beijing to pursue the negotiations.
A Treasury Department spokesperson declined to confirm the report.
“We’re not afraid of a trade war, but that’s not our objective,” Mnuchin said in an interview Sunday on Fox News. “We are going to proceed with our tariffs … we’re also working on investment restrictions,” Mnuchin said. “But we are simultaneously having negotiations with the Chinese to see if we can reach an agreement.”
Investors were encouraged by the backchannel between the world’s two largest economies. Stocks got hammered last week after President Trump announced plans to impose new tariffs on about $50 billion of Chinese goods in retaliation for alleged Chinese intellectual property theft.
China also hit back on Trump’s earlier aluminum and steel tariffs by imposing their own tariffs on about $3 billion worth of imports of US goods, including pork, fruit and wine.
The Dow plummeted more than 1,100 points on Thursday and Friday, slipping into a correction — a decline of 10% from all-time highs in January. The Dow, S&P 500 and the Nasdaq suffered their biggest weekly losses since January 2016.
The bond market also got a boost from the report.
The 10-year Treasury yield climbed to 2.84% Monday. Last week, the 10-year yield fell sharply to 2.81% last week as investors sought safe haven from volatile stocks. Yields move opposite to prices.
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