U.S. stocks surged Tuesday, recouping steep losses from the previous session, as investors bet on easing trade tensions between the U.S. and China.
The Dow Jones Industrial Average rose 1,009 points, or 2.7%, while the S&P 500 gained 2.4% and the Nasdaq Composite climbed 2.5%.
Markets spiked after Treasury Secretary Scott Bessent told a group of investors that the current U.S.-China trade standoff is “unsustainable” and signaled that a “de-escalation” is likely. “No one thinks the current status quo is sustainable,” Bessent said during a JPMorgan-hosted meeting, according to sources cited by Bloomberg.
Stocks closely tied to China responded positively, with the iShares China Large-Cap ETF and the iShares MSCI China ETF each rising about 3%.
Deal could take years
However, equities eased from session highs after Bessent also warned that trade talks had yet to formally begin and that a final deal could take years.
“If we walk out the door of negotiations and signed something in two or three years that looked like that, I would think that it’s a huge win,” he reportedly said.
The sharp reversal came after Monday’s sell-off, when the Dow fell nearly 1,000 points following President Trump’s renewed attacks on Fed Chair Jerome Powell. Investors remain wary of the uncertain direction of U.S. trade policy, especially as the administration also engages in discussions with India.
Tesla shares rose 5% ahead of its earnings report, although the EV maker remains down roughly 40% year-to-date, amid slumping demand and political controversy surrounding CEO Elon Musk.
The global crypto market cap is at $2.85T, a 4.30% increase over the last day with Bitcoin – btc 6.57%- Bitcoin trading at $91,340
