The tariffs on Chinese goods had been set to rise from 10% to 25% on Saturday. But US trade officials said in a statement Thursday they would file documents to suspend the hikes "until further notice."
The Shanghai Composite gained 1.8% on Friday, while the smaller, tech-heavy Shenzhen Composite added 1.2%.
There was also some positive economic data out of China, where an unofficial gauge of manufacturing activity rebounded in February. Still, economists warn the bounce may be temporary.
"While there are signs that credit growth is starting to bottom out thanks to policy support, the usual lags mean that last year's slowdown in lending will probably continue to weigh on economic activity until at least the middle of this year," Julian Evans-Pritchard, senior China economist at Capital Economics, wrote in a research note.
2. Gap soars on company split: Shares in Gap (GPS) soared 23% in extended trading after the company announced Thursday that it would break into two businesses.
One of the companies will contain Old Navy, while the other business will comprise Gap, Banana Republic and other brands including Athleta and Hill City.
The separation is a tale of two vastly different businesses. Old Navy has thrived in recent years, and sales at stores open at least a year grew 3% in 2018.
Meanwhile, the Gap has struggled — its sales fell 5% last year. Banana Republic has been closing stores, which has helped the company improve sales.
3. Musk gets to $35,000: Shares in Tesla (TSLA) dropped almost 4% in extended trading after CEO Elon Musk said the company will close stores and lay off workers to produce a cheaper Model 3.
Tesla has long promised a version of its Model 3 sedan that would cost $35,000. The company said Thursday that it had finally achieved the price point, which Musk described as "excruciatingly difficult."
The move means that Tesla will close stores and shift sales worldwide to online only. It declined to say how many of its stores will close or how many jobs will be affected
4. Huawei fights back: Chinese tech company Huawei on Thursday pleaded not guilty to federal charges that it tried to steal trade secrets from T-Mobile (TMUS).
The company was arraigned in Seattle federal court, where a judge set a trial for March 2, 2020. The US Justice Department made the charges public last month.
The case comes amid a broader pressure campaign against the company by the US government, which claims Huawei's technology poses a national security threat. Huawei has denied the allegations.
5. Global market overview: US stock futures were pointing higher. European markets opened with gains, following a positive session in Asia.
The Dow Jones industrial average, the S&P 500 and the Nasdaq each dropped 0.3% on Thursday. Despite the losses, the three main markets all posted overall gains in February.
6. Earnings and economics: Foot Locker (FL), Scripps (SSP), TEGNA (TGNA) and Tribune Media (TRCO) plan to release earnings before the open Friday.
The US Bureau of Economic Analysis will release its core personal consumption report for December at 8:30 a.m. ET. The Institute of Supply Management will release manufacturing data at 10:00 a.m. ET.
Economic data released in Europe painted a grim picture of the region's economy.
Manufacturing survey data published by IHS Markit showed that factory activity in Germany sank further into contraction in February. German businesses blamed the decline on factors including falling car sales, weaker demand from China and anxiety over Brexit.
Manufacturing also slipped in the eurozone overall, as modest gains in France failed to offset further drops in Italy and Spain.
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