(Bloomberg) Put a whipsaw on a rollercoaster and you are close to how traders would describe the recent spate of swings in U.S. stocks, kick-started once more by a barrage of tweets by President Donald Trump.
It began Friday while investor focus was firmly on Federal Reserve Chairman Jerome Powell’s speech in Jackson Hole, Wyoming. Trump quickly stole his thunder, labeling China’s Xi Jinping a potential enemy on Twitter, announcing he’d retaliate against the Asian nation’s latest tariffs and ordering U.S. companies out of the country. U.S. stocks suffered one of their worst losses of the year, falling as much as 3%, as investors rushed for the exits into the safer hands of Treasuries and gold.
Cue weekend confusion when Trump acknowledged having second thoughts on escalating the trade war -- only for his top spokeswoman to later say he meant he regretted not raising tariffs even more. U.S. stock futures fell another close to 2% when Asian markets re-opened Monday morning.
It was only when conciliatory noises came from China’s Vice Premier Liu He that stocks pared losses, which obviously impressed Trump enough to agree to “calm” negotiation. The prospects for a deal with China are better now than at any time since negotiations began last year, the president concluded, even as a top state-media editor in Beijing questioned his version of events.
The net result of the three-day Tweetstorm left U.S. equities down about 1.5%, as of Monday’s close, and traders picking up the pieces.
“It’s the way I negotiate. It’s done very well for me over the years. And it’s doing even better for the country,” Trump told reporters. It’s not doing much for investor stress levels.
