US close: Stocks recover from worst performance of the year
Wall Street stocks closed sharply higher on Tuesday, bouncing back from their worst day so far this year in the previous session as trade tensions eased somewhat.
At the close, the Dow Jones Industrial Average was up 1.21% at 26,029.52, while the S&P 500 closed 1.30% firmer at 2,881.77 and the Nasdaq Composite saw out the session 1.39% stronger at 7,833.27.
The Dow closed 311.78 points higher after stocks finished well in the red on Monday, following on from heavy losses seen across Asian indices overnight.
Monday's sell-off began last week when Donald Trump surprised everyone with a round of new tariffs on Chinese goods. Markets took an even more negative turn when, come Monday, Chinese authorities allowed the yuan to break to its lowest level against the US dollar in over a decade.
In response, the US Treasury Department designated China a currency manipulator and Trump took to Twitter to voice his disgust at both the move and his own central bank.
"China dropped the price of their currency to an almost a historic low. It's called 'currency manipulation'. Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!," he said.
Later in the day, National Economic Council Director Larry Kudlow told CNBC Trump was still open to a trade deal that would lead to flexibility on tariffs.
"The reality is we would like to negotiate," Kudlow said. "We're planning for the Chinese team to come here in September. Things could change with respect to the tariffs."
However, stocks began to stage a rebound on Tuesday after China's central bank made it clear that it wanted its currency to trade at a higher-than-expected level to the US dollar, easing tensions about the nation using its currency as a weapon in the trade war.
Shares in US firms dependent on China advanced on Tuesday, with the likes of Nike, Apple, Caterpillar and Micron all traded higher.
Elsewhere on the corporate front, Ford closed 2.60% firmer after analysts at Morgan Stanley upgraded the stock, while Bausch Health was down 3.17% at the close despite raising its full-year estimates following a strong second-quarter earnings update.
Disney shares fell in extended trading after reporting a quarterly earnings miss.
On the data calendar for Tuesday, US labour market conditions appeared to remain relatively stable in June with the number of new posts being offered by companies and Americans' willingness to voluntarily take the risk of changing jobs both little changed from the month before.
According to the results of the Department of Labor's JOLTS job market survey for June, the number of job openings declined by 36,000 versus the month before to 7.348m, while the number of so-called 'quits', or voluntary separations, slipped by 45,000 to 3.422m.
At 2.3%, the quits rate was unchanged from both its level during the month before and versus one year ago.