TORONTO — North American markets rallied Tuesday after enduring a deep hit to start the week due to the escalating U.S.-China trade war.
The partial recovery was spurred by tweets from U.S. President Donald Trump in which he said the U.S. was in a “much better position” to strike a deal.
“As soon as he sent out the tweet that he’s not that concerned about the dispute at this point gave the market an element of relief rally,” said Sid Mokhtari, executive director of institutional equity research at CIBC.
Algorithms that are used to influence trading by following social media feeds accentuated the rebound, he said.
But Mokhtari said it’s premature to say if there is “conviction” behind the rally that will make it hold since trading volumes were very light.
“Whether or not it’s going to be able to show follow through tomorrow is still questionable unless we get another tweet effectively,” he said in an interview.
The S&P/TSX composite index closed up 91.12 points to 16,284.53 after hitting an intraday low of 16,206.22. The gain almost compensated for the 104-point drop on Monday.
Eight out the top 11 major sectors increased, led by health care, which grew 3.07 per cent on the back of rebounds from several cannabis companies, including Cronos Group Inc., Aurora Cannabis Inc. and Hexo Corp.
U.S. markets were up, but recovered about one third of Monday’s losses.
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