On Tuesday, US stocks surged following a turbulent day on Wall Street, as hopes of US-Japan tariff discussions raised optimism for other trade agreements amid escalating tensions between China and President Trump.

The S&P 500 index climbed 3.2%, the Nasdaq Composite rose 3.6%, and the Dow Jones Industrial Average gained 3.4%, marking an increase of over 1,300 points at the opening bell.

Investors returned to the market after a volatile session on Monday triggered by Trump's tariff announcements, which led to a 350-point drop in the Dow and a significant three-day decline for the S&P 500.

Market sentiment improved when Treasury Secretary Scott Bessent confirmed the initiation of trade talks with Japan, easing concerns about the White House's willingness to negotiate tariffs. Meanwhile, the Nikkei 225 index in Tokyo rebounded 6% from its recent low as investors welcomed signs of US flexibility.

Despite the positive market movement, the possibility of a trade war between the US and China remained a concern. China made a strong statement vowing to resist US pressure and retaliate if necessary, in response to Trump's threat to impose increased tariffs on Chinese imports.

Key figures in the financial industry, such as JPMorgan CEO Jamie Dimon and BlackRock CEO Larry Fink, have expressed apprehensions about the impact of Trump's trade policies. Even Elon Musk, CEO of Tesla and a Trump advisor, has shared subtle criticisms of the recent tariff decisions.