NEW YORK (AP) — Stocks are rising sharply on Wall Street Tuesday after Chinese President Xi Jinping said Beijing would reduce tariffs on imported cars and improve intellectual property protection, steps that could ease tensions with the U.S.
Lower tariffs could mean better sales for U.S. car companies, while banks could also gain entry into the Chinese market. That sent automakers and financial companies higher.
Energy companies jumped along with the price of oil, a sign investors are getting more confident that the trade tensions won’t have a big effect on the global economy. Technology and industrial companies also rose.
“The market’s increasing expectation is that the two sides will sit down now,” said Paul Christopher, head of global market strategy for Wells Fargo Investment Institute. “There’s still a lot at stake because you have a global supply chain that could be interrupted because of tariffs.”
The S&P 500 index surged 46 points, or 1.8 percent, to 2,659 as of 3 p.m. Eastern time. The Dow gained 453 points, or 1.9 percent, to 24,432. Shortly before noon it rose as much as 532 points. The Nasdaq composite added 144 points, or 2.1 percent, to 7,094. The Russell 2000 index of smaller-company stocks advanced 31 points, or 2.1 percent, to 1,545.
Stocks had been on track for a similarly big jump Monday before a late slump wiped out most of their gains. The Dow rose as much as 440 points during the day, but finished just 46 points higher.
Indexes overseas also climbed. Germany’s DAX jumped 1.1 percent and the British FTSE 100 gained 1 percent. The French CAC 40 gained 0.8 percent. Japan’s benchmark Nikkei 225 gained 0.5 percent and South Korea’s Kospi added 0.3 percent while Hong Kong’s Hang Seng added 1.7 percent.
Speaking at a business conference, Xi promised changes in areas that the U.S. has identified as priorities. He didn’t address other thorny topics including requirements for foreign companies to give technology to potential local competitors.
General Motors rose 3.3 percent to $39.07 and Ford rose 2.4 percent to $11.52. Tesla climbed 5.4 percent, to $305.25.
Among banks, JPMorgan Chase gained 1.7 percent to $112.31 and Citigroup picked up 1.8 percent to $70.71.
Technology and industrial companies have made some of the biggest swings on the market during the trade spat. If the U.S. and China both place tariffs on imports from the other, industrials face greater costs as well as with lower sales. Technology companies might face manufacturing changes and slower growth in the global economy.
Apple climbed 1.7 percent to $173.01 and chipmaker Texas Instruments gained 2.7 percent to $102.51. Among industrials, aerospace company Boeing rallied 3.8 percent to $334.58 and construction equipment maker Caterpillar jumped 3.7 percent to $148.37.
So far the U.S. has proposed tariffs on at least $150 billion worth of products made in China, and China has said it could put tariffs on $50 billion in goods imported from the U.S. Christopher, of Wells Fargo, said the U.S. still has a lot of leverage because it has mostly targeted products that are only partly assembled in China.
“The U.S., in the next round of tariffs, could start targeting goods that the Chinese do mostly produce themselves,” he said. That would cause China more economic pain.
Facebook CEO Mark Zuckerberg is appearing before two Senate committees, and the company has started alerting some users that their data was swept up by Cambridge Analytica in the privacy scandal that has engulfed Facebook over the last four weeks. As many as 87 million users were affected.
Facebook shares have dropped sharply since the scandal emerged in March. They rose 2.1 percent to $161.24 Tuesday.
Benchmark U.S. crude rose 3.3 percent to $65.51 a barrel in New York. Brent crude, used to price international oils, added 3.5 percent to $71.04 a barrel in London. Oil prices have bounced up and down recently as investors wonder if the trade dispute will hamper global economic growth.
Exxon Mobil added 3.7 percent to $77.62 and Marathon Oil jumped 5.3 percent to $17.21.
Wholesale gasoline rose 2.9 percent to $2.04 a gallon. Heating oil added 3.4 percent to $2.06 a gallon. Natural gas lost 1.4 percent to $2.66 per 1,000 cubic feet.
Gold rose 0.4 percent to $1,345.90 an ounce. Silver added 0.4 percent to $16.60 an ounce. Copper climbed 1.9 percent to $3.14 a pound.
VeriFone Systems surged after it agreed to be bought by Francisco Partners and British Columbia Investment Group. The investment group will pay $23.04 a share, or $2.54 billion, for VeriFone, which makes terminals for electronic payments. VeriFone stock climbed 52 percent, to $22.80.
Bond prices turned lower. The yield on the 10-year Treasury note rose to 2.80 percent from 2.78 percent.
The dollar climbed to 107.26 yen from 106.78 yen. The euro rose to $1.2353 from $1.2322.
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