The US markets ended higher on Tuesday as markets regained some of their bullish form, a day after a sharp escalation in US-China trade tensions triggered the worst session for major indexes since early January. The markets benefited from continued optimism the US and China will eventually reach a trade deal despite the retaliatory tariffs announced by China. President Donald Trump has continued to express confidence the Chinese will yield to US demands, claiming a trade agreement was 95% complete before China reneged. Trump has repeatedly argued that the US is in a stronger position than China in the negotiations, citing the recent strength of the US economy. Trump also indicated that he would be meeting with Chinese President Xi Jinping at the G20 Summit in Japan late next month.
On the economic front, with a drop in prices for non-fuel imports partly offsetting another jump in prices for fuel imports, the Labor Department released a report showing US import prices rose by much less than expected in the month of April. The Labor Department said import prices crept up by 0.2% in April after climbing by 0.6% in March. Street had expected import prices to increase by 0.7%. The uptick in import prices reflected a continued spike in prices for fuel imports, which surged up by 2.5% in April after soaring by 6.9% in March. A 6.1% jump in petroleum prices drove the increase in fuel prices. On the other hand, the report said prices for non-fuel imports edged down by 0.1% in April after dipping by 0.2% in March. Falling prices for finished goods and non-fuel industrial supplies and materials more than offset an increase in prices for foods, feeds, and beverages.
Dow Jones Industrial Average surged 207.06 points or 0.82 percent to 25532.05, Nasdaq rose 87.47 points or 1.14 percent to 7734.49 and S&P 500 was up by 22.54 points or 0.80 percent to 2834.41.
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