Stocks recover after China trade deal scare

Stocks opened with gains Tuesday after a warning from President Trump’s top trade adviser Monday threw the market into an after-hours selloff.

The Dow Jones Industrial Average opened with a gain of 200 points, rising 0.8 percent Monday. The S&P 500 rose 0.8 percent and the Nasdaq composite rose 0.9 percent.

Tuesday’s solid start came after stock futures sank Monday night after a Fox News interview with White House trade adviser Peter Navarro. He appeared to say that Trump’s phase one trade deal with China was “over” amid increasing tensions between the U.S. and China over Beijing’s handling of the coronavirus pandemic.

“I think everybody here inside the perimeter and around this country now understands that China lied and Americans died,” said Navarro, who is among the administration’s most ardent supporters of aggressive retaliation against China.

Dow futures plunged 400 points after Navarro’s comments, but both he and Trump quickly walked back his declaration.

“The China Trade Deal is fully intact. Hopefully they will continue to live up to the terms of the Agreement!” Trump tweeted.

Navarro also claimed in a statement to Fox News that his comments “have been taken wildly out of context.” 

“They had nothing at all to do with the Phase I trade deal, which continues in place. I was simply speaking to the lack of trust we now have of the Chinese Communist Party after they lied about the origins of the China virus and foisted a pandemic upon the world,” he continued.