(Reuters) – U.S. stocks surged more than 1.5% on Tuesday after the Trump administration said it would delay 10% tariffs on some Chinese products, including laptops and cell phones, driving a 4% rally in shares of iPhone maker Apple Inc.
The administration also excluded video game consoles and certain items of footwear and clothing from the 10% tariff, scheduled to start next month, an abrupt pullback from its hardline stance on trade.
It eased the fears of a recession triggered by the protracted trade war that dominated Wall Street this year and spurred a bout of volatility after President Donald Trump announced a new round of tariffs in August.
“The delay in the next round of tariffs is a positive for the tech sector and it is addressing any potential impact on the consumer as we head into year-end whether it’s back to school or holiday shopping,” said Mike Loewengart, vice-president of investment strategy at E*Trade Financial in New York.
“It’s tough to say what the timeline of a trade deal is. All indications are that China is gearing up for a protracted dispute while expectations in the U.S. are for a much quicker resolution.”
A 4.1% jump in shares of Apple (AAPL.O), which makes iPhones and MacBooks in China, along with a rise in chip stocks pushed the technology sector 2.38% higher. The Philadelphia chip index .SOX rose 3.04%.
Industrial bellwethers 3M Co (MMM.N) and Caterpillar Inc (CAT.N), traditionally among the most sensitive to trade concerns and China, jumped about 3% each, while the S&P 500 retailing index .SPXRT gained 2%.
Wall Street’s main indexes opened lower, adding to a global slide in stocks due to geopolitical concerns, with a U.S. Labor Department report showing that the core consumer price index rose 2.2% in the 12 months through July.