The market is downplaying the risk of a runaway trade dispute between the U.S. and China, influential strategist Bob Doll told CNBC on Thursday.
"The probability of the worst is not real high in the market's view," Doll, chief equity strategist at Nuveen Asset Management, said on "Squawk on the Street." As for recent bouts of equity sell-offs, Doll said, "We've probably seen the low, and the last few days have been a successful test of it."
President Donald Trump rattled markets earlier this week when he proposed tariffs on 1,300 Chinese products, which spurred China to announce $50 billion worth of tariffs on American goods.
The Dow, S&P 500 and Nasdaq were up for the third day in a row on Thursday after falling Monday.
Doll said a negotiation with China was more likely than an ongoing tit-for-tat tariff exchange. He attributed the trade actions to Trump's "Art of the Deal" negotiating style. "You go out there with trumpets and bullhorns, and you argue 20 and your negotiator on the other side of the table argues 10. You settle at 15," Doll said.
Another reason for calming stocks is that "the market is looking at some other things beyond trade," Doll said. "Starting next week we're going to look at some pretty good earnings."
Despite strong earnings and the possibility of easing trade tensions, market jitters may continue, Doll said. "I still think we're in a fragile, volatile sort of stage."