China tariff cut set to power Wall Street to record highs

New York (Reuters), Wall Street’s main indexes were set to hit record highs at the open on Thursday as China’s plan to chop additional tariffs on some American goods by 50% helped ease fears over the financial fallout of the coronavirus epidemic.

Beijing said it would lower extra levies imposed last year against 1,717 U.S. products, weeks after the signing of a Phase 1 trade deal.

The tariff cut follows hefty monetary stimulus by China’s central bank earlier this week to support an economy hit by shutdowns and travel restrictions due to the virus outbreak.

The fear investors had when the virus first started seems to have abated somewhat, said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

A string of positive U.S. economic data too have helped mitigate worries, fueling a three-day rally on Wall Street. The Nasdaq .IXIC hit a record high on Wednesday and the S and P 500 .SPX is on pace for its best week in eight months after last week’s steep pullback.

However, the impact of the health emergency in China continued to show up in corporate reports. Chipmaker Qualcomm Inc (QCOM.O) flagged a potential threat to the mobile phone industry from the outbreak, with a possible impact on manufacturing and sales.Its shares fell 1.8% in premarket trading.

Source: Bahrain News Agency