However, some observers cautioned that the U.S. and China have yet to diffuse broader tensions.
“The result is better than the market expected, but the huge divide remaining continues to suggest a bumpy ride ahead,” Citigroup China economist Li-Gang Liu told the WSJ, pointing to differences in the Chinese and U.S. accounts of the deal – Chinese officials made no mention of the three-month deadline.
Signs that the two countries were open to pursing further talks helped assuage markets and investors, whom were worried about a worst cast scenario of escalating trade barriers and falling global growth. Many did not expect tariff increase could be avoided ahead of the meeting.
“Trade is a big deciding factor for markets because it affects profit growth, so the U.S.-China willingness to continue talks is certainly positive,” Sam Stovall, chief investment strategist at CFRA, told the WSJ.
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