US stocks open higher as Chinese yuan stabilizes

About 20 minutes into trading, the Dow Jones Industrial Average stood at 25,863.41, up 0.6 percent. (File photo: Reuters)

Wall Street stocks opened solidly higher on Tuesday as China took steps to stabilize its currency amid an escalating trade war with the United States.

About 20 minutes into trading, the Dow Jones Industrial Average stood at 25,863.41, up 0.6 percent.

The broad-based S&P 500 gained 0.7 percent, rising to 2,865.18, while the tech-rich Nasdaq Composite Index rose 1.1 percent to 7,809.83.

US stocks have fallen the last six days, with especially bruising losses on Friday and Monday following the latest tit-for-tat measures between Beijing and Washington.

Stocks sold off on Friday after US President Donald Trump announced new tariffs on $300 billion in Chinese goods and again Monday after China let its currency depreciate and signaled it would halt purchases of US agricultural goods.

On Tuesday, China's central bank “seemingly applied a discretionary 'counter-cyclical adjustment' to brake the yuan's slide,” said Carl Weinberg, chief international economist at High Frequency Economics.

“In other words, it could have used its currency management rules to steer the yuan even cheaper, but it did the opposite,” said Weinberg.

Weinberg described the ongoing US-China trade war as “debilitating for the global economy because of the uncertainty it causes for businesses and financial markets.”
 

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Last Update: 14:10 KSA 17:10 - GMT 14:10
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