Stocked plummeted early Wednesday after trade tensions escalated between China and the United States. China announced plans for a 25% tariff on $50 billion a year worth of American exports, including plans, cars, soybeans and chemicals.
The Dow opened down more than 500 points. But the market erased those losses by early afternoon, and later was up more than 100 points.
The United States has announced its own tariffs to punish China for stealing trade secrets. But the tariffs on both sides remain only threats and plans. It's not clear when they would take effect, and the two countries are talking.
Investors may have also been comforted when Larry Kudlow, head of President Trump's National Economic Council, said the administration was not angling for a trade war.
"I can understand the stock market anxiety. I get that. But don't overreact," Kudlow said on Fox Business. The tariffs, he said, will lead to "better economic growth, more trading going on, improved wages on both sides."
"I'm not a fan of tariffs," he said, but added that they are "part of the process."
