Dow ends the day positive after Mnuchin and Trump call China talks "constructive"

US tariffs on Chinese goods raised from 10% to 25%

By Anneken Tappe, CNN Business
Spencer Platt/Getty Images

(CNN) - The Dow bounced back from its earlier losses on Friday after Treasury Secretary Steven Mnuchin and President Donald Trump characterized talks with Chinese negotiators as "constructive." But the trade turmoil this week still gave the index its worst week since March.

The Dow finished up 114 points, or 0.4% higher — a big recovery after being down as much as 300 points earlier in the day. Mnuchin's comments to CNBC led stocks to move off their lows. Trump followed them up with a tweet, saying the talks would continue and calling his relationship with China's President Xi Jinping "strong."

The S&P 500 and Nasdaq also rebounded. Both snapped a four-day losing streak, but still had their worst week since December.

In the latest development in the China-US trade spat, American tariffs on $200 billion worth of Chinese goods increased from 10% to 25% at 12:01 am ET on Friday.

Beijing expressed "deep regret over the development" and reiterated that the possibility of retaliatory sanctions.

Amid all this, Chinese Vice Premier Liu He arrived in Washington on Thursday for the latest round of talks. President Donald Trump tweeted that the negotiations continue "in a very congenial manner" bur also spoke out in favor of his tariff strategy.

Trump also said "the process has begun to place additional tariffs at 25% of the remaining 325 billion dollars" worth of goods.

Markets went on a wild ride this week, as investors had assumed a trade deal between the world's two largest economies was close. Instead tensions escalated once again.

Analysts at Goldman Sachs pointed out on Thursday that the new tariffs didn't affect goods that are already in transit, which gives negotiators a short window before they really take effect. Thus, this week's talks are seen as crucial to get back on the path for an agreement.

Global stocks bounced back from their earlier losses in the week. European bourses finished mostly in the green and Asian stocks also closed higher, with the Shanghai Composite Index finishing up 3.1%.

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