Stocks just staged a massive comeback

pulse

March 2, 2018 2:44 PM

Global markets were whacked after the President went on an early morning Twitter rant about trade wars. An afternoon bump led to a mixed close.

Stocks staged an impressive comeback Friday, finishing mixed after a massive morning selloff was fueled by President Trump's tweets about tariffs.
The turmoil comes after
New tariffs on imported metals, expected to be enacted next week, lead to fears of a trade war.

After plunging Friday morning, stocks staged a dramatic comeback to end the day mixed.

Here’s the final scoreboard:

S&P 500
: 2,691.25 (+0.51%)
Nasdaq 100
: 6,808 (+0.90%)

Stocks initially took a beating after President Trump tweeted in support of his forthcoming tariff on imported steel and aluminum.

"When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don't trade anymore-we win big. It's easy!,"he said in a string of early morning tweets.

Industrials were among the hardest hit in the two-day selloff. Caterpillar was down 2.42% and Boeing was down 1.38%. McDonald’s, another Dow component, was down a full 5% after a brutal downgrade by RBC Capital Markets

Despite the two-day selloff, the Cboe Volatility Index, commonly used as an investor ‘fear gauge,’ went down for the first time in four days. It is currently at 20.58.

10-year Treasury yields increased slightly, rising to 2.85%. Crude oil rose slightly to $61.18 per barrel.

The afternoon recovery could be evidence that the initial selloffs from Thursday into Friday that rippled around the world were an overreaction. Tom Lee, co-founder of Fundstrat, said that fears of a trade war were overblown.

"Equity markets are over-reacting—hence, we are aggressive buyers of this dip," Lee said in a note on Friday. In fact, companies with low foreign sales as a share of their total and those that with low sourcing of parts internationally have low exposure to a trade war. They include precious metals and minerals and coal, Lee said.

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