Investors flipped back into buying mode Tuesday after the U.S. said it would hold off on tariffs of Chinese imports of mobile phones, toys and several other items typically on holiday shopping lists. China also said the two sides held discussions on trade overnight and would talk again the next two weeks.
The latest turn in the U.S.-China trade war helped the market make up much of the losses from the previous two days, snapping a two day losing streak for the S&P 500.
The benchmark index rose 42.57 points, or 1.5%, to 2,926.32. It had been up as much as 2.1%. The Dow Jones Industrial Average gained 372.54 points, or 1.4%, to 26,279.91. The average briefly climbed 519 points.
The Nasdaq composite jumped 152.95 points, or 1.9%, to 8,016.36. The Russell 2000 index of smaller company stocks rose 16.30 points, or 1.1%, to 1,510.58. Oil and copper prices surged.
“Maybe today is a little bit too exaggerated because it was a little glimmer of hope about tariffs,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. “However, the drama with China and trade is not over.”
Technology sector stocks, which have been among the biggest losers during heavy selling days this month, led the broad market rebound Tuesday. Health care companies, retailers and banks also notched solid gains. Real estate and utilities lagged the broader market as investors regained their appetite for riskier assets.