Markets jump on Trump tariff pullback

Markets jump on Trump tariff pullback
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Stock markets jumped Tuesday as President TrumpDonald John TrumpDavid Axelrod after Ginsburg cancer treatment: Supreme Court vacancy could 'tear this country apart' EU says it will 'respond in kind' if US slaps tariffs on France Ginsburg again leaves Supreme Court with an uncertain future MORE delayed a new 10 percent tariff on some Chinese imports and exempted others altogether. 

The Dow Jones Industrial Average closed up 373 points, or 1.4 percent, and once again hovered above 26,000. 

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While markets were still about 4 percent below their July peak, the announcement tamed a two-week streak marked by precipitous falls and wild volatility. 

Trump had threatened the 10 percent tariff on $300 billion of Chinese imports earlier this month as trade talks faltered. The threatened tariffs were separate from an earlier round of 25 percent tariffs on $250 billion of Chinese imports.

But on Tuesday, Trump said that he would postpone a group of tariffs until Dec. 15, avoiding potential price increases on popular holiday items such as cellphones, laptops and video game consoles for most of the Christmas season.

Other items were exempted from the tariffs altogether, but many are still slated for the new import tax on Sept. 1. 

Wall Street firms had warned that the new tariffs could hasten an economic moderation or even a recession, which would complicate Trump's bid for reelection. The tariffs themselves were a drag on the economy, they said, but so was the uncertainty on how the trade war would play out and renewed pessimism of a deal being reached ahead of the 2020 elections.

Trump sounded a somewhat optimistic note on Tuesday.

"We had a very good talk yesterday with China, a very, very productive call," he told reporters. 

"I think they want to do something," he added.

Trade talks are scheduled to resume in September, after the more limited round of tariffs takes hold.