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Dow Jones soars more than 400 points as trade war fears subside

Mar 26, 2018, 19:11 IST

At sea aboard USS Kitty Hawk (CV-63) Nov. 14, 2002 -- An F-14 U.S. Navy Photographer's Mate 3rd Class Todd Frantom via Wikimedia Commons

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The Dow Jones industrial average opened up 407 points or 1.7% Monday morning, erasing some of Friday's heavy losses induced by fears of a pending trade war with China.

The benchmark S&P 500 index began the week up 1.56%, while the Nasdaq was up 1.7%.

Stocks saw their worst drop in more than two years last week, falling 5.9%. JPMorgan said that the steep decline took the S&P 500 index below a key technical support level that could open the floodgates to further selling.

"The question on everyone's mind is: Is this an 'ice cube' or the tip of an iceberg," Ethan Harris, the head of global economics research at Bank of America Merrill Lynch, wrote in a client note Friday. "We see four reasons to increasingly worry about an iceberg."

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He outlines four main reasons investors should worry, but if Monday's futures are any indication, that has yet to play out.

Global markets were also higher Monday with Germany's DAX up 0.33% and Japan's Nikkei closing up 1.75%.

President Donald Trump voiced confidence in American markets as well.

"The economy is looking really good. It has been many years that we have seen these kind of numbers," he tweeted Monday morning. " The underlying strength of companies has perhaps never been better."

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