Stocks rebound as US Treasury Secretary says China trade war is unsustainable

Treasury Secretary Scott Bessent told investors Tuesday that the US-China trade war is unsustainable and he expects the battle to de-escalate, a person familiar with the matter confirmed to CNN, giving a boost to a Wall Street rally that had taken shape this morning.

The Dow closed higher by 1,017 points, or 2.66%. The S&P 500 rose 2.51% and the tech-heavy Nasdaq gained 2.71%. The rebound helped recover the market’s losses on Monday, when a major sell-off gripped Wall Street.

US stocks had broadly gained Tuesday as investors waded into the market after the steep Monday sell-off. Stocks extended their gains midday after Bessent told investors at a closed-door event hosted by JPMorgan Chase that he expects de-escalation in the trade spat with China. The event was first reported by Bloomberg.

According to one person in the room, Bessent said that he expects both sides will de-escalate in the very near future because China and the United States effectively have embargoes on each other due to extremely high tariffs.

Instead of a hard break or complete decoupling between the United States and China, Bessent told the investors that the goal is to have a rebalancing of trade, the source told CNN.

The three major stock indexes hit their highest levels of the day after Bessent’s remarks.

The Nasdaq and Dow snapped a four-day losing streak. Despite the rebound, the S&P 500 is on track for its worst month since 2022 and the Dow is on track for its worst April since 1936, according to FactSet data.