U.S. stocks rebounded sharply on Tuesday, with the Dow Jones Industrial Average soaring over 1,000 points, and the S&P 500 and Nasdaq rising 2.5% and 2.7%, respectively. The recovery followed a turbulent start to the week, as investors welcomed signs of trade de-escalation on multiple fronts.
The rally was fueled by comments from U.S. Treasury Secretary Scott Bessent, who said in a private speech that negotiations with China would likely ease tensions โ though he cautioned that the process would be a “slog.”
Markets had dropped the previous day after President Trump escalated his public attacks on Federal Reserve Chair Jerome Powell, deepening investor concerns over central bank independence and policy uncertainty.
Investors also found renewed hope in trade talks with India, as Vice President JD Vance met with Prime Minister Narendra Modi, praising progress on bilateral agreements.
After the bell, Tesla (TSLA) reported disappointing earnings, missing expectations on both revenue and profit. The electric vehicle giant noted challenges from global trade policies, especially around tariffs, which it said may increasingly impact its energy business. The company did not include a growth forecast in its report, adding to investor caution. Shares edged slightly lower in after-hours trading.