Dow jumps 1,300 as some relief washes through financial markets on hopes for tariff negotiations

Some relief is flowing through financial markets worldwide Tuesday as stocks bounce to recover a bit of their historic losses since President Donald Trump dramatically raised the stakes in his trade war last week.

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The S&P 500 was up 3.7% in morning trading, though it still remains more than 14% below its record set in February. The Dow Jones Industrial Average was up 1,363 points, or 3.6%, as of 10:12 a.m. Eastern time, and the Nasdaq composite was 4.2% higher.

The bounce was global. Stock indexes rose 6% in Tokyo, 3.4% in Paris and 1.6% in Shanghai. The price of crude oil also pulled a bit higher after touching its lowest level since 2021 on Monday. Bitcoin steadied and was back above $79,000 after dropping toward $76,000 the prior day. No big change is behind the move back upward, and analysts say more swings up and down are likely for markets in not only the days but also the hours ahead.

The big question remains centered on how long Trump will keep his stiff tariffs on other countries, which would raise prices for U.S. shoppers and slow the economy. If they last a long time, economists and investors expect it to cause a recession. But if Trump lowers them through negotiations relatively quickly, the worst-case scenario can be avoided.

Hope still remains on Wall Street that negotiations may be possible, and Trump said Monday that he reached the “confines and probability of a great DEAL for both countries” after talking with South Korea’s acting president.