Larry Fink, chief executive of world’s largest asset management firm, BlackRock Inc., says that the stock market has probably put in a bottom but that for sentiment to take off, the U.S.’s spat with China on trade needs to get resolved.

Fink told CNBC during an interview Wednesday morning that if the protracted tariff dispute is resolved, “we would see a surge in investment sentiment.”

That would “call of the dogs and it just reduces the tension,” he said, referring to volatility that has becoming a dominant feature of markets, sparked at least partly by trade uncertainty and its potential to impede economic expansion for the world’s largest economies.

Thus far, stock investors have been heartened by solid earnings and signs of progress, with the Dow Jones Industrial DJIA, -0.87% and the S&P 500 index SPX, -1.11% exiting from correction territory last week, on the back of a multiday rally in global markets.

The Nasdaq Composite Index COMP, -1.07% remains in bear-market territory, defined as a decline of at least 20% from a recent peak, but the tech and internet-weighted index has enjoyed potent gains that has thus far helped to push it to a close above its 50-day moving average for the first time since early October. Market technicians use moving averages as a gauge of bullish and bearish trends in an asset.

Fink said he believes that in the short run markets have “hit a bottom” but the trade talks and the outcome of the U.K.’s contentious negotiations to exit from the European Union, known as Brexit, will determine how equities perform in the longer run.

Fink’s remarks come as the asset manager on Wednesday reported assets under management declined in the fourth quarter amid a choppy market environment that had left investors more cautious as the Dow and S&P 500 tumbled into correction and ended December with the worst annual declines since 2008.

BlackRock’s assets under management fell 5% to $5.98 trillion from the comparable quarter a year ago, and down 7% from the previous quarter. Analysts polled by FactSet had expected assets under management to dip to $6 trillion.

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