By Alan Murray and David Meyer
March 27, 2018

Good morning.

Markets around the world continued their rebound overnight and are poised to rise in the U.S. today on hopes that the trade war with China will instead turn out to be a minor skirmish. Yesterday, the Dow rose 669 points, one of the biggest point rises in history, after getting clobbered last week.

Treasury Secretary Steven Mnuchin said Sunday that he’s “cautiously hopeful” that the world’s two biggest economies will reach an agreement to avoid tariffs. And Chinese Premier Li Keqiang said he believes the two countries “both have the intelligence to resolve the issue,” according to an official statement issued late Monday.

“Trade talks going on with numerous countries that, for many years, have not treated the United States fairly. In the end, all will be happy!” President Trump tweeted.

Trade wars can’t be won. But they can be avoided. And if Trump’s brinksmanship forces some useful concessions from China, the market’s March rollercoaster swings may turn out to have been worth the ride.

Meanwhile, reports continue to swirl that North Korean leader Kim Jong-un traveled to Beijing by train for rare meetings there. Neither country is commenting on the trip, but it could be another manifestation of the Trump administration’s disruptive approach to global diplomacy.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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