Stocks jumped on Tuesday amid signs that U.S.-China trade relations could be improving, bringing a sigh of relief to investors in a volatile investing environment.
The Dow Jones Industrial Average rose 353 points at the open, while the S&P 500 climbed 1.1 percent. The Nasdaq Composite surged 1.4 percent.
Earlier on Tuesday, Bloomberg News reported China is moving toward cutting tariffs on cars made in the U.S. to 15 percent from the current 40 percent. The proposal has been submitted to the Chinese Cabinet and will be reviewed in the coming days, the report says.
President Donald Trump also tweeted the administration was having “very productive conversations going on with China,” adding: “Watch for some important announcements.”
Very productive conversations going on with China! Watch for some important announcements!
— Donald J. Trump (@realDonaldTrump) December 11, 2018
Shares of Ford Motor, General Motors and Fiat Chrysler all rose more than 2 percent.
Meanwhile, Chinese Vice Premier Liu reportedly said Tuesday that he had been in discussion with U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, with the aim of de-escalating a global trade war.
Caterpillar shares rose 2.7 percent while Deere gained more than 3 percent.Shares of Boeing climbed more than 1 percent. These stocks are seen as bellwethers for global trade because of their exposure to overseas markets.
The positive reports on trade come as Wall Street tries to regain its footing. Worries over trade and of a possible economic slowdown sending stocks for a volatile ride. The Dow and S&P 500 were both down more than 1 percent for the year heading into Tuesday’s session. Earlier this year, they hit all-time highs.
Last week, mixed messages surrounding a U.S.-China trade truce struck between Trump and Chinese President Xi Jinping led the major averages to their worst weekly performance since late March.The two indexes also fell sharply on Monday, along with the Nasdaq, before a sharp rebound led by tech stocks.
“There are two major factors here: a new level of trade talks is under way, and the number of bearish market calls got significantly higher,” said Peter Cardillo, chief market economist at Spartan Capital Securities. “That usually signals the end to an ongoing sell-off. I think this rally could go on through the end of the year.”
—CNBC’s Spriha Srivastava contributed to this report.\