Stock markets shrug off talk of U.S.-China trade war

All of the talk of rising trade tensions between the U.S. and China has not scared stock market investors. The Dow Jones industrial average is up 1.9 percent since Friday, when President Barack Obama slapped new duties on Chinese tires. In the same period, the S&P 500 and Nasdaq Composite Index both gained 2.5 percent. The picture in the red-hot stock markets in China is similar where indexes in Hong Kong and Shanghai both posted gains Wednesday. Whether this calm will last remains to be seen.

"Although investors are not yet facing World War III between the two economic superpowers, it's enough to make the markets very nervous," writes Jim Trippon, editor of the China Stock Digest, in a statement released to the press. "Alarmists are worried that China, which holds about a trillion dollars worth of U.S. financial instruments could declare a real economic war. "