NEW YORK, April 22 (Xinhua) -- U.S. stocks advanced on Tuesday, as investors grew optimistic that U.S.-China trade tensions may soon ease, following reassuring remarks from the U.S. Treasury Department.
The Dow Jones Industrial Average rose 1,016.57 points, or 2.66 percent, to 39,186.98. The S&P 500 added 129.56 points, or 2.51 percent, to 5,287.76. The Nasdaq Composite Index increased by 429.52 points, or 2.71 percent, to 16,300.42.
All of the 11 primary S&P 500 sectors ended in green, with financials and consumer discretionary leading the gainers by rising 3.28 percent and 3.23 percent, respectively. Consumer staples posted the weakest growth, up by 1.61 percent.
The rally gained traction after U.S. Treasury Secretary Scott Bessent told investors that there would be a "de-escalation" in the ongoing trade war with China - a comment that stoked hopes of a near-term breakthrough in negotiations. "No one thinks the current status quo is sustainable," he said Tuesday during a meeting with investors hosted by JPMorgan Chase.
The stocks roared back after the news, snapping a sharp losing streak. "Bessent is obviously trying to send a signal with that comment, and that signal would seem to be that we know this is hurting markets and we're in a hurry to wrap it up," said Jed Ellerbroek, portfolio manager at Argent Capital Management. "The market will interpret that as good news that will cause it to rally and adjust its expectations for where the final resting place for this trade war is in a couple months."
Still, uncertainty lingered after U.S. President Donald Trump repeated his attacks on Fed Chair Jerome Powell on Monday, warning in a Truth Social post that the U.S. economy could slow without immediate interest rate cuts. He again labeled Powell "Mr. Too Late" and a "major loser," and reiterated prior hints at firing him - an action economic advisor Kevin Hassett confirmed is under consideration.
In a note released Tuesday, UBS strategists cautioned that U.S. equities could face further downside pressure, depending on how trade tensions evolve, particularly with China. "We may be past peak tariff uncertainty, but it's still a high plateau, which will have a material impact on earnings growth, which doesn't appear to be priced presently. Valuations, too, will adjust lower still as U.S. exceptionalism wanes," wrote strategist Bhanu Baweja.
Goldman Sachs CEO David Solomon also added his voice to the growing chorus of concern on Tuesday, warning that economic uncertainty remains "too high," hindering corporate investment decisions and putting sustained pressure on asset prices. Adding to the unease, the Institute of International Finance, a leading global banking industry association, said the United States faced a likely recession later this year.
