US close: Dow records best single-day performance in a month
Stocks closed higher on Tuesday after Wall Street indices tumbled during the previous session when China announced its plans to raise tariffs on $60bn-worth of US imports on 1 June.
At the close, the Dow Jones Industrial Average was 0.82% higher at 25,532.05, while the S&P 500 moved ahead 0.80% to 2,834.41 and the Nasdaq closed 1.14% firmer at 7,734.49.
The Dow closed more than 200 points higher on Tuesday, recording its best day in a month.
The bounce came even as Investors continued to digest news around the escalating trade war between the United States and China and a day after all three major indexes crashed following the announcement that Beijing would slap items as varied as TV cameras to tequila or pesticides with a tariff increase ranging from 10% to 25%.
Donald Trump took to Twitter on Monday to warn China that it will be "hurt very badly" if it fails to make a trade deal.
He also stated that companies would be forced to leave the Asian giant without an agreement, adding that China had a "great deal" that it "backed out" of.
The president then continued his war of words with China on Tuesday, with a series of tweets claiming tariffs had rebuilt America’s steel industry and criticising Beijing for walking away from a deal.
In a barrage of tweets posted late morning BST on Tuesday, Trump said that "in one-year tariffs have rebuilt our steel industry – it is booming! We placed a 25% Tariff on dumped steel from China & other countries, and now we have a big and growing industry.”
He also argued that China "buys MUCH less from us that we buy from them, by almost $500bn, so we are in a fantastic position", adding: "We can make a deal with China tomorrow, before their companies start leaving so as not to lose USA business, but the last time we were close they wanted to renegotiate the deal. No way! We are in a much better position now than any deal we could have made.
"We will be taking in billions of dollars, and moving jobs back to the USA where they belong. Other countries are already negotiating with us because they don’t want this to happen to them."
On the data front, small business optimism improved throughout the month of April, increasing by 1.7 points to 103.5, with one index component falling, another unchanged and the remaining eight improving.
March's soft spot in inventories improved and profit trends posted a very solid advance, according to the National Federation of Independent Business, as labour market indicators improved, with a solid gain in job creation plans and continued reports of strong hiring.
"Overall, the index remains at a historically very strong level, consistent with solid growth, keeping the economy at full employment. There is no recession in sight this year," said the NFIB.
Elsewhere, US import prices edged higher last month on the back of dearer fuel imports.
According to the Department of Labor, import prices rose at a 0.2% month-on-month clip (consensus: 0.7%) in April but were lower 0.2%year-on-year.
On the export side of the equation, prices increased by 0.2% month-on-month and 0.3% on the year, despite a 1.5% drop in the cost of agricultural exports.
In corporate news, Walmart shares closed 0.40% higher after it announced its intentions to take on Amazon with its own next-day delivery programme.
Comcast was up 1.49% at the end of the session after it agreed to sell its stake in Hulu to Disney in five years but has given up its voting rights immediately, meaning that Disney now has full control of the streaming service. Disney closed 1.42% firmer.
Coca-Cola shares bubbled up 1.33% on Tuesday after analysts at Morgan Stanley turned bullish on the stock, while Ralph Lauren closed 3.69% softer despite posting a first-quarter sales and profits beat.