Major U.S. stock indexes rallied more than 3% on Tuesday, snapping a three-day losing streak marked by heightened volatility, as investor sentiment improved on hopes of progress in U.S. tariff negotiations.
Wall Street rallies on tariff talk hopes
The S&P 500 surged 3.1%, the Dow Jones soared by 1,300 points (3.5%), and the Nasdaq rose 3.2%, marking one of the strongest single-day gains in recent weeks. This significant rebound followed encouraging comments from Treasury Secretary Scott Bessent, who revealed that approximately 70 countries, including Japan, had reached out to the White House to initiate tariff talks, signaling potential progress toward resolving the ongoing trade tensions. The news helped soothe investor nerves, which had been rattled by the recent volatility and fears of an escalating trade war.
Despite this market optimism, U.S.-China tensions remained elevated, with both sides engaged in a war of words. Beijing reiterated its firm stance, declaring it would "fight to the end" in response to President Trump’s threat to impose 50% tariffs unless China rapidly removed its retaliatory measures. This escalatory rhetoric raised concerns about the potential for a prolonged trade standoff. In addition, Trump mentioned he was waiting for a call from Chinese officials to initiate further trade negotiations, but the uncertainty surrounding the timeline for these talks weighed on some market participants.
Who's outperforming
Among individual stocks, UnitedHealth Group stood out, surging 7.7% after the U.S. government announced higher-than-expected reimbursement rates for Medicare Advantage health plans. This news provided a significant boost to the health insurance giant, as it was seen as a positive development for the broader healthcare sector. The surge in UnitedHealth's stock was part of a broader rally in healthcare stocks, which benefitted from the administration's favorable stance toward the industry and improved reimbursement policies.
Although the overall market showed strong signs of recovery, investors remained cautious about the potential for renewed volatility in the coming weeks, as the trade dispute with China continues to loom large over the global economy. Still, the rally offered a welcome respite for those concerned about the negative effects of prolonged trade tensions, with some analysts suggesting that the market could continue to stabilize if tariff negotiations make measurable progress.
