Equities Rebounded as Traders Bet on Tariff Progress – US Market Wrap

US equities rose, almost erasing Monday’s drop, as traders launched risky wagers that the White House will reach vital trade agreements with key economic partners. The dollar rebounded marginally from Monday’s lows, and short-term Treasury yields rose.

The S&P 500 climbed 2.5%, its highest day in nearly two weeks, after a series of headlines raised Wall Street’s hopes that tariff-related hostilities are reducing as the US makes headway in fleshing out accords.

Earlier, stocks had risen further following a report of closed-door comments by Treasury Secretary Scott Bessent stating that the tariff standoff with China is unsustainable and that he expects the situation to de-escalate.

Bessent’s comments come after the International Monetary Fund significantly lowered its predictions for global growth this year and next, warning that the outlook could worsen due to the trade war.

Treasuries and the dollar still posted smaller moves on Tuesday, showing greater stability after Monday, when investors were worried about the implications of any effort to replace Fed’s Powell by Trump, who has berated Powell for being slow to cut interest rates.

While the 10-year Treasury yield scarcely moved on Tuesday, two-year yields jumped to 3.82% due to low demand at an auction.

Similar to yesterday, Tuesday’s large moves in equities came amid lighter-than-usual trading, a backdrop that sometimes exacerbates swings.

After the markets closed, Tesla disclosed adjusted results that fell short of analyst expectations. The corporation stated that President Donald Trump’s trade war has harmed its worldwide supply chain and might have a “significant impact on demand” in the near future. As of 4:10 PM ET, Shares were little changed in extended trading in New York.