- 3M jumps after results
- Northrop Grumman, RTX tumble
- IMF cuts US growth forecast
- Indexes up: Dow 2.66%, S&P 500 2.51%, Nasdaq 2.71%
- Stocks surge in extended trade after Trump says no plan to fire Powell
(Reuters) - U.S. stocks rebounded on Tuesday as a spate of quarterly earnings reports and hints at the de-escalation of U.S.-China trade tensions brought buyers in from the sidelines.
U.S. stocks jumped further in extended trade after President Donald Trump said he has no plans to fire Federal Reserve Chair Jerome Powell, stepping back from his recent rhetoric against the central bank chief.
Trump also told reporters he would be very nice in negotiations with China, and that tariffs on imports from the country would fall significantly following a deal, but not to zero.
In a sign that traders expect Wall Street to rally on Wednesday, S&P 500 futures jumped almost 2% following Trump's comments, while Amazon.com and Nvidia were last up 3% each and Apple climbed 2% in after-hours trading.
During Tuesday's session, a broad rally boosted all three major U.S. indexes by more than 2.5%, as investors looked past Trump's attacks against Powell, who is widely considered a stabilizing force for the markets.
After being battered for weeks by the White House's erratic and multi-front tariff disputes, the S&P 500 at Tuesday's close was nearly 14% below its record closing high reached on February 19.
Earlier on Tuesday Treasury Secretary Scott Bessent said that while trade negotiations with Beijing will likely be "a slog," he believes there will be a de-escalation of U.S.-China trade tensions.
"The roller coaster continues," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "Some thawing of the aggression (between) U.S. and China, thanks to Bessent’s comments, helped push things higher."
"Washington understands that the uncertainty around tariffs is hurting markets and maybe we can get some type of positive news going forward on the trade front," Detrick added.
Those uncertainties helped prompt the International Monetary Fund to slash its forecasts for U.S. economic growth to 1.8% in 2025, citing the impact of U.S. tariffs, now at 100-year highs.
Meanwhile, the first-quarter earnings season gathered steam.
So far, 82 of the companies in the S&P 500 have reported. Of those, 73% have beaten expectations, according to LSEG.
Analysts now see aggregate S&P 500 earnings growth at 8.1% for the January - March period, down from the 12.2% growth forecast at the beginning of the quarter, per LSEG.
"Current earnings are showing a continuation of good fundamentals, which is not a surprise," said Bill Merz, head of Capital Market Research at U.S. Bank Wealth Management, Minneapolis, who added investors are parsing corporate guidance for "clarity on what companies are planning to do in response to tariff policy."
Shares of industrial conglomerate 3M Co jumped 8.1% after the company posted better-than-expected first-quarter profit expectations, though it flagged a likely hit to 2025 profit from tariffs.
Northrop Grumman slumped 12.7% after it reported a sharp drop in profit.
Aerospace and defense company RTX tumbled 9.8% after flagging a potential $850 million hit to its annual profit due to tariffs.
The Dow Jones Industrial Average rose 1,016.57 points, or 2.66%, to 39,186.98, the S&P 500 gained 129.56 points, or 2.51%, to 5,287.76 and the Nasdaq Composite gained 429.52 points, or 2.71%, to 16,300.42.
All 11 major sectors in the S&P 500 advanced, with financials and consumer discretionary enjoying the largest percentage gains.
Advancing issues outnumbered decliners by a 6.4-to-1 ratio on the NYSE. There were 50 new highs and 44 new lows on the NYSE.
On the Nasdaq, 3,580 stocks rose and 796 fell as advancing issues outnumbered decliners by a 4.5-to-1 ratio.
The S&P 500 posted 4 new 52-week highs and one new low while the Nasdaq Composite recorded 31 new highs and 76 new lows.
Volume on U.S. exchanges was 15.21 billion shares, compared with the 18.94 billion average for the full session over the last 20 trading days.
Reporting by Stephen Culp; Additional reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; additional reporting by Noel Randewich in San Francisco; Editing by Aurora Ellis and Chris Reese
Source: Reuters