Wall Street had a strong rebound on Tuesday after the White House expressed confidence in resolving the ongoing trade tensions with China. Major indices, including the Dow Jones and Nasdaq, closed significantly higher, reversing Monday’s losses.
From Tension to Optimism
Speaking at a closed-door event in Washington, US Treasury Secretary Scott Bessent hinted that the US-China tariff war could soon ease, fueling investor optimism. Later, White House spokeswoman Karoline Leavitt added, “The president and the administration are setting the stage for a deal… the ball is moving in the right direction.”
Market Gains
- Dow Jones surged 2.7% to close at 39,187.04
- S&P 500 rose 2.5% to 5,287.76
- Nasdaq Composite gained 2.7% to 16,300.42
“This is another example of how the risk is to the upside,” said Sam Stovall of CFRA Research, noting the market had been oversold due to recent bearish sentiment.
Corporate Impact
Tuesday also saw mixed earnings reports:
- GE Aerospace jumped 6.1% after reporting strong profits and implementing cost-cutting to handle tariff impacts.
- RTX, however, plunged 9.8% after disclosing a potential $850 million loss due to tariffs.
IMF Warning & Fed Tensions
Despite the positive market sentiment, the IMF downgraded global growth forecasts, citing the disruptive effect of Trump’s tariff policies.
Monday’s market fall was driven by Trump’s renewed criticism of Federal Reserve Chair Jerome Powell, which initially pushed up bond yields.
“The threat of Trump firing Powell is enough to push the market down three percent,” said Stovall. “If he actually did it, it would fall even more.”
Bond Yields Ease
After a spike on Monday, US Treasury bond yields retreated on Tuesday, helping to stabilize the broader market.
