US stocks jumped on Friday after the White House signaled optimism around a trade deal with China – which earlier in the morning struck back with a 125% tax on US goods – to end a wildly volatile week on Wall Street.
The Dow Jones Industrial Average gained 619 points, or 1.6%, after plummeting 1,014.79 the day before. For the week, the blue-chip Dow climbed 5%, its biggest percentage gain since November 2023.
The index has been on a wild ride over the past week as markets struggle to absorb back-and-forth trade war news, plunging more than 4,000 points after President Trump revealed his so-called “reciprocal” tariffs last Wednesday, then recovering more than 1,500 points this week after he announced a 90-day pause on most of his harsher tariffs.
The S&P 500 and Nasdaq jumped 1.8% and 2.1%, respectively on Friday. The Nasdaq surged 7.3% for the week, its biggest gain since November 2022.
The stock indexes plunged Friday morning after China marked its third retaliatory effort against the US. Stocks recovered their losses by the afternoon, after the White House said Trump is “optimistic” that China will seek a deal with the US.
China’s move to hike tariffs on US imports came soon after Trump announced a 125% tax on the nation, blaming its “lack of respect.”
The White House later confirmed the total tariff on China was 145%, after stacking on top of earlier levies.
During a press conference on Friday, a spokesperson for China’s Ministry of Commerce said the Trump administration’s approach to tariffs was a “numbers game which has no practical significance on economics.”
“It’s become a joke,” the spokesperson continued in a dig at Trump.
However, China also offered a small glimmer of hope for investors fearful the trade war could reheat inflation, hinting it’s not looking to raise rates again in the future.
“If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it,” the country’s finance ministry said.
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