Stocks spike as China stands down in trade war

U.S. stocks are sharply higher Wednesday morning after China's commerce ministry said Beijing won't retaliate when the Trump administration raises tariffs.

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"We are resolutely opposed to the escalation of the trade war and are willing to resolve the issue through consultation and cooperation in a calm attitude,"  Gao Feng, spokesman for China’s Ministry of Commerce, said Thursday.

Gao's comments come after the U.S. Trade Representative's office said on Wednesday that  $300 billion worth of Chinese goods would see tariffs raised by 5 percent on a list of $300 billion of Chinese imports on Sept. 1.

All three of the major market averages gained over 1 percent with the Dow Jones Industrial Average tacking on 300 points at the open, before pulling back.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27691.49+0.00+0.00%
SP500S&P 5003091.84+4.83+0.16%
I:COMPNASDAQ COMPOSITE INDEX8486.09056+21.81+0.26%

Trade sensitive names like Caterpillar, Boeing, and Micron Technology were gaining ground in the opening minutes of trade.

TickerSecurityLastChangeChange %
CATCATERPILLAR INC.146.34-1.66-1.12%
BABOEING COMPANY362.88-4.08-1.11%
MUMICRON TECHNOLOGY INC.46.90+0.64+1.38%

On the earnings front, Dollar General was sharply higher after posting better-than-expected sales and same-store sales and raising its guidance in the face of the escalating trade war.

TickerSecurityLastChangeChange %
DGDOLLAR GENERAL156.98-0.02-0.01%
BBYBEST BUY75.19-1.06-1.39%

Elsewhere, Best Buy shares were under pressure after the electronics retailer lowered its revenue and same-store sales guidance for the rest of the year, citing some uncertainty around tariffs.

The Commerce Department on Wedensday morning released the second estimate of second-quater gross domestic product, which showed the U.S. economy grew at a 2 percent pace. That was in line with the expectations of economists surveyed by Refinitiv, and just below the advance estimate of 2.1 percent.

In Europe, stocks were rallying as trade tensions eased, with France's CAC leading the way. Overnight, Hong Kong's Hang Seng led a mixed session in Asia, closing up 0.34 percent.

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Ken Martin contributed to this article.