The S&P 500 experienced a notable bounce on Tuesday, driven by a broad rally across major indices after signals of easing tariff tensions between the U.S. and China. U.S. Treasury Secretary Scott Bessent indicated these tensions are unsustainable.

Market Performance

• Dow Jones Industrial Average: +2.7% (+1,016 points)

• S&P 500: +2.5%

• Nasdaq Composite: +2.7%

• Treasury Yields:

  • 10-year U.S. yield: down ~3 bps to 4.30%

  • 2-year U.S. yield: steady near 4.85%

Bessent’s Perspective on Trade Relations

• Key Takeaway: Current tariff standoff with China is unsustainable.

• Outlook: Expects de-escalation soon.

• Remarks: Made at a private JPMorgan investor summit, covered by CNBC.

Diverging Fed Perspectives on the Economy

• Neel Kashkari (Minneapolis Fed): Warned of potential recession driven by tariffs and declining confidence.

• Thomas Barkin (Richmond Fed): Suggests inflation expectations may loosen, hinting at support for rate cuts if labor market weakens.

Sector Highlights

Technology, financials, and industrials led the market rally, driven by trade optimism and expectations of potential rate cuts.

Upcoming Events to Watch

• Trade Talks: Expect announcements regarding U.S.-China negotiations.

• Earnings Reports: Major companies such as Alphabet (GOOGL) and Tesla (TSLA) report soon; guidance will be crucial.

• Economic Data:

  • Flash PMIs (Wednesday) for insights on manufacturing vs. services.

  • Upcoming data on Consumer Confidence and Retail Sales.