Stocks recovered on Tuesday after a steep sell-off the day before, bolstered by investors’ hope for a potential de-escalation in President Trump’s trade wars, though signs of anxiety remain.
The S&P 500 rose 2.5 percent, reversing its losses from Monday, when the index fell 2.4 percent. Mr. Trump’s tariff policies are still driving sentiment on Wall Street. The stock market rally on Tuesday gained steam after Bloomberg reported that Treasury Secretary Scott Bessent said during a closed-door investor summit that he expected the tariff standoff with China to de-escalate.
Karoline Leavitt, the White House press secretary, later told reporters that the Trump administration was “setting the stage for a deal with China.”
The gains signified a reversal from Monday’s sell-off, which accelerated after Mr. Trump again targeted Jerome H. Powell, the chair of the Federal Reserve, this time in a social media post, urging him to cut interest rates and suggesting that an economic slowdown would be Mr. Powell’s fault. Mr. Trump’s comments have unnerved investors who see the independence of the central bank as critical to the health of the American economy.
Gold, which briefly rose above $3,500 an ounce on Tuesday for the first time before pulling back, has set a series of records in recent weeks, during a largely ugly stretch for the markets. It has been soaring since early April when investors, alarmed by Mr. Trump’s tariffs, starting selling Treasury bonds. Investors often see gold as a safe haven during times of turmoil, and its price has surged more than 30 percent since the start of the year.
“Gold has again moved to yet another record, with its safe-haven reputation shining bright,” analysts at RBC Capital Markets said. “With the uncertainty related to Fed independence, gold continues to benefit as a safe-haven, and one not tied to the U.S. dollar.”
Elsewhere in the markets:
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Major U.S. stock indexes rebounded, with all sectors gaining and the technology-heavy Nasdaq jumping 2.7 percent.
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The dollar, which slumped on Monday against a range of currencies, stabilized on Tuesday. An index that tracks the dollar against a basket of currencies rose 0.7 percent. Recently, a weaker dollar has raised concern that investors may be moving away from a decades-long belief that the dollar and U.S. assets are a safe haven, and they are instead choosing to put their money elsewhere.
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The yield on 10-year Treasury bonds fell slightly, to 4.4 percent. (Yields move inversely to prices.) That stabilization came after U.S. government bonds, which have emerged as a major concern for Wall Street and the White House, showed renewed signs of stress on Monday.
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The Trump administration’s whiplash on trade policy continues to weigh on companies. “The level of uncertainty is too high — it’s not productive,” David Solomon, the chief executive of Goldman Sachs, said in a CNBC interview on Tuesday. “It’s affecting investment spending and planning, and that will have an effect on growth in the economy,” he added.
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In economic projections released on Tuesday, the International Monetary Fund said it expected slower growth and higher inflation in the United States as a result of Mr. Trump’s trade policies.
