The Dow and the broader stock market are rebounding Tuesday, after China took steps to ease the budding currency war with the United States.
China priced the yuan's reference rate at 6.9683 to the dollar on Tuesday, a hair above the key 7:1 ratio to the US dollar. Although that was the weakest level for the yuan in 11 years, many Wall Street investors feared China would price the yuan below that psychological 7:1 barrier.
The managed yuan continued to slide Tuesday, but the pace of its decline slowed. One dollar last bought $7.0188 yuan in China, and 7.0515 yuan in the offshore market, where the currency trades more freely.
Late Monday. the United States labeled China a currency manipulator.
But the sentiment is better nonetheless.
The Dow traded as much as 200 points, or 0.8%, higher Tuesday morning, while the S&P 500 bounced 0.9% higher. The tech-heavy Nasdaq Composite, which was hit worst in Monday's selloff, traded 1.3% higher.
Stock investors also took comfort in the Chinese central bank announcing plans to issue central bank bills worth 30 billion yuan next week. That supported China's currency, which bounced back slightly against the dollar after the announcement.
Read the full story of how markets are doing today here.