Stocks Rebound After Trump Says Deal With China Still Possible

The major U.S. stock indexes are trading lower at the mid-session but well off their intraday lows. Earlier in the session, the markets traded sharply lower in response to comments from President Donald Trump who said China “broke the deal” at a rally Wednesday evening. Investors dumped positions as they took protection against the possibility a potential trade agreement between the United States and China would fall apart after months of serious negotiation.

In the cash market at 17:00 GMT, the benchmark S&P 500 Index is trading 2873.32, down 6.10 or -0.22%. The blue chip Dow Jones Industrial Average is at 25788.68, down 178.65 or -0.69% and the technology-based NASDAQ Composite is trading 7921.17, down 22.15 or -0.30%.

Just a short while ago, President Trump said he has an “excellent” alternative to a possible trade deal with China, as Chinese officials are set to meet U.S. trade negotiators later in the evening in Washington. Prior to his comments, the Dow was down over 400 points.

Theyll see what they can do,“ Trump said of the Chinese delegation after an event at the White House about ending so-called surprise medical billing. ”But our alternative is an excellent one.

“It‘s an alternative I’ve spoken about for years. We‘ll take in well over a hundred billion dollars a year. We never took in 10 cents from China,” Trump said. “And I think it’ll be a very strong day, frankly. But well see.”

Trump also said it might be possible for China and the U.S. to strike a deal this week. “It‘s possible to do it, they’re all here. The vice premier one of the most respected men one of the highest officials in China is coming,” he said.

When asked if he would speak with Chinese President Xi Jinping, Trump said, “Well, he just wrote me a beautiful letter, I just received it, and Ill probably speak to him by phone.”

With the major indexes regaining more than half of their earlier losses, they are now in a position to post a major technical closing price reversal bottom. This chart pattern may not change the main trend to up on the daily chart, but it could trigger the start of a 2 to 3 day rally.