U.S. Stocks Rally on Hopes for China Trade De-escalation

The S&P 500 bounced back on Tuesday, led by a broad surge across major indices after U.S. Treasury Secretary Scott Bessent signaled that tariff tensions with China could ease soon. Fed officials' mixed messages on inflation and recession risks added another layer of market intrigue.

Market Performance

• Dow Jones Industrial Average: +2.7% (+1,016 points)

• S&P 500: +2.5%

• Nasdaq Composite: +2.7%

• Treasury Yields:

  • 10-year U.S. yield: down ~3 bps to 4.30%

  • 2-year U.S. yield: steady near 4.85%

Bessent Tees Up Trade De-escalation

• Key Takeaway: Tariff standoff with China is “not sustainable” at current levels.

• Outlook: Expects de-escalation “in the very near future.”

• Context: Remarks made at a private JPMorgan investor summit, as reported by CNBC.

Diverging Fed Voices

• Neel Kashkari (Minneapolis Fed): Warned of a tariff-driven recession, citing plunging confidence post-tariff rollout.

• Thomas Barkin (Richmond Fed): Suggested inflation expectations may be loosening, hinting at potential support for rate cuts if labor market softens.

Sector & Stock Highlights

Tech, financials, and industrials led the rally on the back of trade optimism and rate-cut hopes. To see today's top performers, check out the
🔗 Market Biggest Gainers Market Overview API
from Financial Modeling Prep for real-time leaderboards.

What's on Deck

• Trade Talks: Watch for official announcements on U.S.-China negotiations and any updated tariff schedules.

• Earnings Season: Big tech names like Alphabet (GOOGL) and Tesla (TSLA) report next week—guidance will be critical.

• Economic Data:

  • Flash PMIs (Wed) for early signals on manufacturing vs. services resilience.

  • Consumer Confidence and Retail Sales slated later this week.