NEW YORK: US stocks bounced back on Tuesday as industrial and technology stocks pulled the market higher on news of a possible easing of tariff tensions between the United States and China.
The markets were buoyed by a Bloomberg report that U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are discussing ways to avert a trade war between the world’s two largest economies.
The trade-sensitive industrial sector led the S&P 500 and the Dow Jones Industrial Average higher, rising 2.0 percent a day after a broad sell-off in technology and FAANG momentum stocks pulled markets lower.
“It’s just a reversal of the last couple of days,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. “With the FAANG stocks getting crushed and growth doing very poorly relative to value over the last three days or so we’re seeing the reversion back to the trends that have been in place.”
Apple Inc shares were up 0.6 percent. The smartphone maker’s results were due after the bell, the last to report among the FAANG group, which also include Facebook Inc , Amazon.com, Netflix Inc and Google parent Alphabet Inc.
At less than 3 percent shy of Apple’s record high of $195.96, touched last week, well-received results could propel the shares to a new all-time peak.
The U.S. Federal Reserve meets this week and is expected to hold interest rates steady, but solid economic data and rising inflation will likely keep it on track for two more rate hikes this year.
A report from the Commerce Department showed a 1.9 percent increase in the core PCE price index, hewing closely to the Fed’s 2 percent inflation target.
The Dow Jones Industrial Average rose 140.34 points, or 0.55 percent, to 25,447.17, the S&P 500 gained 15.6 points, or 0.56 percent, to 2,818.2 and the Nasdaq Composite added 47.58 points, or 0.62 percent, to 7,677.58.
The second-quarter reporting season remains in full-swing, and analysts now expect second-quarter profits for S&P 500 companies to have increased 22.9 percent from last year, up from the 20.7 increase seen on July 1.
Of the 301 companies in the index that have reported to date, 81.1 percent have beaten consensus estimates.
Procter & Gamble Co shares edged up 0.6 percent after the consumer products company reported disappointing quarterly sales.
Drugmaker Pfizer Inc beat second-quarter estimates but lowered its full-year revenue forecast and increased its planned research & development expenditures. The stock was up 2.9 percent.
CBS Corp reversed its slide, rising 2.3 percent after Les Moonves survived as the company’s CEO following the board’s decision to select an outside counsel to investigate claims of misconduct.
Shares of Chipotle Mexican Grill slid 7.9 percent after reports of customers getting ill prompted the closing of an Ohio restaurant.
Advancing issues outnumbered declining ones on the NYSE by a 2.26-to-1 ratio; on Nasdaq, a 1.97-to-1 ratio favored advancers.
The S&P 500 posted 18 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 27 new highs and 62 new lows.