US stocks rebound after China’s Xi Jinping announces cuts on import tariffs

US stocks rose on Tuesday after Chinese President Xi Jinping announced that China will cut import tariffs on automobiles and other imports as well as open its markets to more trade and investment, easing concerns of trade tensions between the US and China escalating any further.

Investors appear to feel alleviated of heightened fears that there will be a trade war between the two economic giants and are trying to get back in to the market and reposition themselves.

The Dow Jones Industrial Average rose 428.9 points, or 1.79 percent, to 24,408. The S&P 500 rose 43.71 points, or 1.67 percent, to 2,656.87 while the tech-heavy Nasdaq Composite rose 143.96 points, or 2.07 percent, to 7,094.30.

Facebook was the best performer in the S&P 500 index, climbing up 4.5 percent after CEO Mark Zuckerberg gave his testimony before Congress and took questions from US lawmakers.

Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, was quoted by Nasdaq as saying that the “markets are saturated and it is a bit of profit taking as the markets get set for the most anticipated financial earnings this Friday.”

According to Thomson Reuters I/B/E/S, analysts forecast S&P 500 companies’ quarterly profits to rise 18.5 percent from last year.

Ed Keon, chief investment strategist at QMA, told the Washington Post that the bull market still has room to grow.

“Today is a combination of a bounce back from Friday’s downturn, which may have been overdone on trade fears, and Xi’s comments,” Keon said.

“Although there wasn’t a tremendous amount of new substance [from Xi], it may have cooled the environment and reduced the risk of a trade war in investors’ minds.”

“The markets want to go higher,” Keon added. “The most important fundamental to stock prices in the long run is corporate profits. And we are just starting the first-quarter earnings season, and the results are likely to be terrific.”