U.S. stock markets rebounded strongly on Tuesday as renewed hopes of a thaw in U.S.-China trade tensions triggered a wave of buying across equities and digital assets.
The Dow Jones Industrial Average surged 1,009 points, or 2.7%, while the S&P 500 rose 2.4% and the Nasdaq Composite gained 2.5%. The rally came after Treasury Secretary Scott Bessent signaled that the White House considers the current trade deadlock with China untenable and hinted that talks to ease tensions may soon begin.
According to sources cited by Bloomberg, Bessent told investors at a JPMorgan gathering that “no one thinks the current status quo is sustainable,” suggesting that a diplomatic shift is likely.
China-Focused Assets and Crypto Join the Rebound
The upbeat remarks helped lift stocks closely tied to Chinese markets. The iShares China Large-Cap ETF and iShares MSCI China ETF both advanced nearly 3%.
Meanwhile, the rally extended into crypto markets. The global cryptocurrency market cap increased to $2.85 trillion, up 4.30% in the past 24 hours. Bitcoin jumped 5.55% to trade around $91,340, according to crypto.news data.
Uncertainty Persists Despite Positive Signals
While markets welcomed the tone of Bessent’s comments, gains moderated after he cautioned that formal trade negotiations are still in their early stages. He noted that a completed agreement may take substantial time and could be years away from signing.
“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,” Bessent said.
The cautious follow-up tempered enthusiasm, reminding traders that a resolution to the U.S.-China trade conflict may still take significant effort and time.
Tesla Rises Ahead of Earnings as Market Recovers From Monday’s Rout
Shares of Tesla rose 5% ahead of its quarterly earnings report. Despite the day’s gains, the automaker remains down about 40% year-to-date, as it grapples with demand issues and ongoing controversies involving Elon Musk.
Tuesday’s rebound helped offset steep losses from Monday, when U.S. stocks tumbled after President Trump lashed out at Fed Chair Jerome Powell, deepening concerns about political interference in monetary policy.
As the market digests mixed signals on trade and rates, Bessent’s tone on China offered just enough optimism to drive a turnaround — even if the long game remains uncertain.
