Back on Monday, investors panicked after China let its currency plummet to rock bottom, lowest in a decade following U.S. President Donald Trump’s warning last Thursday to impose 10% tariffs on a further $300 billion worth of imported goods from China, effective on September 1st. As an outcome, the index dropped for 87.31 points, or 3% and concluded at 2,844.74.

On Tuesday, stocks experienced a rally, stopping its six consecutive days of dwindling and subsequent to its biggest drop which occurred on Monday. The biggest underdogs on Monday were stocks who deal with China such as Apple, Micron Technology and Nike. On Tuesday, these same stocks were the ones who drove in gains. As a result, the S&P 500 index went up 37.03 points, or 1.3% and ended the day at 2.881.77 driven by the index’s information technology and communication services sectors’ rally.

This current movement in the market looked promising after the central bank of China took action to contain the decline that their currency has experienced with a repair on Tuesday to 6.9683. On Monday, a break into the 7-to-the dollar level, which was comprehended by a few as a deliberate reduction of China’s currency, triggered the global stock market to go into a sell off mode and also resulted in a plummet on bond yields. 

By: Cyril Latrice Cajanding