Stocks rebound on trade relief

Trump tweet assures that China pact is on

U.S. stocks rebounded Tuesday from overnight losses after Washington reassured investors that the trade accord with China was still intact.

The Dow Jones industrial average climbed 131.14 points to end at 26,156.10, after futures briefly shed 400 points Monday evening. The Standard & Poor’s 500 added 0.4% to close at 3,131.29, retracing losses after dropping 1% overnight.

The Nasdaq Composite rose 0.7% to close at a fresh record of 10,131.37, helped by strong gains from Apple after the company unveiled new features for its iPhones and Mac computers at its annual WorldWide Developers Conference.

Investors were spooked by reported comments by White House trade adviser Peter Navarro suggesting the U.S. trade deal with China was in trouble. Navarro, however, said his comments were taken out of context, and President Donald Trump tweeted that the agreement with China, the basis for a truce in a tariff war over technology and other problems, is still on.

“It appears this administration is ever so confused as the president says one thing and his trade advisor says another,” Peter Cardillo, Spartan Capital Securities

Technology sector stocks, which led the way higher as the market rebounded the past three months from a 34% plunge, helped power the latest gains. Health care stocks and companies that rely on consumer spending were among the big gainers.

Bond yields rose slightly, another sign that investors were regaining confidence in the economy.

Comments by either side suggesting progress or problems with the trade agreement have added to the uncertainties prevailing in the midst of the pandemic, pushing and pulling at share prices. The Federal Reserve and other global central banks have intervened to calm markets in recent months in an effort to restore confidence among investors after the pandemic battered the global economy.

“It appears this administration is ever so confused as the president says one thing and his trade advisor says another,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a note. “We believe these types of uncertainties could lead to another round of unsettled markets in spite of the Fed’s printing presses working at full speed.”

After early losses, global markets pressed higher in Asia and Europe.

Investors appeared to look past surging coronavirus cases in the U.S. and other countries to focus on evidence of economic recovery. Volatility has grown since stocks rebounded 40% from their March lows on hopes the worst of the pandemic was over.