US stocks erase losses, finish higher after Trump refrains from China sanctions
- US stocks gained on Friday, reversing earlier losses, after President Donald Trump said he would take steps to revoke Hong Kong's preferential treatment but stopped short of imposing sanctions on China.
- US consumer spending in April also posted the biggest drop on record as the personal savings rate jumped to a record 33% from 12.7%.
- Oil rose on Friday, capping off its best month ever on a percentage-return basis.
- Read more on Business Insider.
US stocks rallied on Friday, reversing earlier losses, after President Donald Trump's press conference on China offered fewer fireworks than expected.
During the anxiously awaited address, Trump said he would take steps to revoke Hong Kong's special treatment but did not impose sanctions on China or indicate that the US would pull out of the phase-one trade deal the countries reached earlier in the year.
Here's where US indexes stood at the 4 p.m. ET market close on Friday:
- S&P 500: 3,044.31, up 0.5%
- Dow Jones industrial average: 25,383.11, down 0.1% (18 points)
- Nasdaq composite: 9,489.87, up 1.3%
Tensions between the US and China came back into the spotlight this week after Beijing moved to impose national-security legislation for Hong Kong. On Thursday, the JPMorgan analyst Marko Kolanovic said stocks could trade "drastically lower" on the renewed tension, walking back a months-long bullish stance.
Earlier in the day, stocks were weighed down by a report showing that US consumer spending dropped by 13.6% in April as the coronavirus pandemic kept businesses closed and people at home. The personal savings rate jumped to a record 33% from 12.7% as people looked to stockpile cash.
Federal Reserve Chairman Jerome Powell discussed the economy and the central bank's actions to provide relief in a conversation with former Vice Chair Alan Blinder on Friday. Powell reiterated that negative interest rates were not the right tool for the US economy and noted that the coronavirus downturn had exacerbated inequality.
Oil rallied, capping off its best-ever monthly performance on a percentage-return basis. West Texas Intermediate crude gained 4%, to $35.17 per barrel. Brent crude, the international benchmark, gained 4%, to $37.47 per barrel.
Peet's Coffee raised $2.5 billion in an initial public offering that defied the pandemic, the company announced on Friday. The offering, which took only 10 days, was Europe's largest and the world's second-largest of 2020.