Wall Street rebounded sharply on Tuesday, regaining ground lost in the previous session as investor sentiment improved on signs that the standoff between the United States and China could soon ease.
The Dow Jones Industrial Average rose 1,009 points, climbing 2.7%, while the S&P 500 advanced 2.4% and the Nasdaq Composite gained 2.5%. The surge followed comments from Treasury Secretary Scott Bessent, who told a group of investors that the current trade impasse with China is “unsustainable,” hinting that a policy shift could be on the horizon.
Bessent’s remarks came during a JPMorgan-hosted meeting, where he reportedly suggested that a de-escalation in tensions is becoming more likely. Bloomberg cited sources at the meeting who said Bessent believes that “no one thinks the current status quo is sustainable.”
Stocks With China Exposure Lead the Gains
Equities with strong exposure to China were among the biggest gainers. The iShares China Large-Cap ETF and the iShares MSCI China ETF both rose by about 3%, reflecting renewed investor optimism in the sector.
The broader cryptocurrency market also benefited from the shift in sentiment. The total global crypto market cap climbed to $2.85 trillion, a 4.30% daily increase. Bitcoin traded at $91,340, up 5.55%, as per crypto.news.
Caution Remains as Negotiation Timeline Stretches
Despite the optimism, markets pulled back slightly from session highs after Bessent warned that a formal agreement could still be far off. While he acknowledged the need for de-escalation, he also clarified that talks haven’t officially begun and that any deal could take years to materialize.
He was quoted saying, “If we walk out the door of negotiations and signed something in two or three years that looked like that, I would think that it’s a huge win.”
Tesla Climbs, but Long-Term Challenges Persist
Tesla shares rallied by 5% ahead of its latest earnings release. Despite Tuesday’s bounce, the electric vehicle maker’s stock remains down approximately 40% in 2025, driven by weakening demand and continued public scrutiny of CEO Elon Musk.
The rebound in equities follows Monday’s dramatic selloff, when the Dow fell nearly 1,000 points after President Trump publicly attacked Federal Reserve Chair Jerome Powell, unsettling investors already on edge about interest rates and inflation.The improvement in tone around U.S.-China trade relations offered temporary relief for markets, although long-term clarity remains elusive.
