The major U.S. stock indices were rising on the afternoon of April 11 after the administration of U.S. President Donald Trump signaled that it is open to a trade deal with China.
The benchmark S&P 500 index was up 1.55% while the technology-laden Nasdaq Composite index
climbed 1.7% higher in mid-afternoon trading. The blue-chip Dow Jones Industrial Average increased 500 points as Wall Street looks to conclude what’s been a wild trading week.
The increase to close out the week comes after the White House said that President Trump is “optimistic” that China will seek a deal with the U.S. to end the current trade war between the world’s two biggest economies. This latest comment comes after the U.S. hit Chinese imports with tariffs of 145% and China retaliated with tariffs of 125% on American imports.
It’s not clear if China has signaled that it wants a new trade deal with the U.S. In announcing its 125% duties on American imports earlier on April 11, the Chinese government in Beijing called President Trump’s tariffs “a joke.”
An Off-Ramp?
Markets have been watching for signs of an off-ramp in the escalating bilateral trade war between the U.S. and China. Economists have warned that the tit-for-tat retaliation between the two super powers threatens to push the global economy into a recession and cause further financial turmoil, including in the bond market where the yield on the 10-Year Treasury is back at 4.50%, a worrisome level.
The past week has been one of the most volatile periods ever for Wall Street. The major averages have whipsawed between historic losses and gains as the Trump administration has both ratcheted up and walked back its tariff policies. The CBOE Volatility Index, known as the VIX, earlier in the week spiked above 50 before last hovering near 44 — both elevated levels that indicate extreme fear among investors.
Is the Vanguard S&P 500 ETF a Buy?
The Vanguard S&P 500 ETF (VOO), which tracks the movements of the benchmark U.S. stock index, has a consensus Moderate Buy rating among 506 Wall Street analysts. That rating is based on 412 Buy, 86 Hold, and eight Sell recommendations made in the last three months. The average VOO price target of $570.91 implies 18.89% upside from current levels.
