Stocks ended higher Tuesday after the Trump Administration delayed planned tariffs on China, relieving traders who had feared trade tensions between the two countries were escalating.
The Dow Jones Industrial Average added almost 373 points, or 1.44%, to end around 26,280, while the Standard & Poor’s 500 gained 43 points, or 1.48%, to finish at 2,926.
The tech-heavy Nasdaq composite led the major indexes, jumping 153 points, or 1.95%, to close at 8,016.
“There have been ongoing issues between the U.S. and China, and we had a string of negative developments in the last couple of weeks,” said Charlie Ripley, senior investment strategist for Allianz Investment Management. “So, we finally got a small dose of good news signaling possible progress and markets are reacting positively.”
Stocks rallied after the Office of the U.S. Trade Representative on Tuesday said it would postpone until Dec. 15 the tariffs on many products, including cellphones, laptop computers, video game consoles, some toys, computer monitors, shoes and clothing.
Some products were removed from the tariff list for “health, safety, national security and other factors," the office said.
Companies that make and sell toys, apparel and electronics led Tuesday's rally. The move by the Trump administration is a welcome one for retailers worried about the impact of tariffs on holiday shopping.
Best Buy's stock added 6.47%. Shares of L Brands, which owns Victoria's Secret and Bath & Body Works, gained 2.81%. Dollar Tree stock increased by 3.96%.
“During this delay period, we urge the administration to develop an effective strategy to address China’s unfair trade practices by working with our allies instead of using unilateral tariffs that cost American jobs and hurt consumers,” said David French, senior vice president of government relations for the National Retail Federation, in a statement.
Apple shares also jumped 4.23% to $208.97 apiece on Tuesday.
“For Apple, which has become the poster child of this US-China trade battle, this is a major shot in the arm,” wrote Daniel Ives, an analyst at Wedbush Securities, in a note Tuesday. “As importantly (Apple) will be facing no tariff noise/costs when the trifecta of iPhones launch in the September time-frame.”
Tariffs still loom
The rebound comes after weeks of back-and-forth between the U.S. and China. Trump stunned markets at the beginning of the month when he vowed to enact 10% tariffs on $300 billion in Chinese goods on Sept. 1.
Items on the 122-page September list include clothes, jewelry, linens, sunglasses, select motorcycles and mopeds, watches, guns and sports equipment.
Shortly after, China allowed its currency to decline to a politically sensitive level against the U.S. dollar and threatened to halt purchases of all U.S. agricultural goods. The country said it was in response to “trade protectionism.”
Stocks plummeted, with all three major indexes recording their worst rout of the year on Aug. 5 followed by a week of dramatic swings.
“Expect more volatility until we have this uncertainty lifted from the market,” Ripley said. “But there doesn’t appear to be a finish line in sight.”
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
This article originally appeared on USA TODAY: Dow : Stocks finish higher after US delays some China tariffs