By Jesse Cohen
Investing.com - U.S. stock markets rallied on Tuesday, one day after Wall Street’s major indices suffered their worst sell-off of the year as trade war tensions between China and the U.S. rattled markets.
The blue-chip Dow was up 146 points, or about 0.6%, by 10:45AM ET, the S&P 500 rose 20 points, or nearly 0.7%, while the tech-heavy Nasdaq jumped 78 points, or 1%.
Wall Street saw its worst trading day of 2019 on Monday, with the S&P 500 tumbling 3%, amid an escalation in the U.S.-China trade war.
The index has fallen for six consecutive sessions leading into Tuesday and is about 6% below its record closing high on July 26.
The sell-off began last week when Federal Reserve Chair Jerome Powell struck a more hawkish tone than expected at the U.S. central bank’s post-meeting press conference on July 31 after he failed to signal a series of rate cuts.
Markets were then whipsawed by U.S. President Donald Trump, who on Friday shockingly announced fresh tariffs on an additional $300 billion in Chinese goods, starting on September 1.
Market reaction became even more negative on Monday, when Chinese authorities let the yuan break past the symbolic 7-per-dollar level to reach its weakest level since the 2008 Global Financial Crisis.
Several investors viewed the move in the Chinese currency as a direct response to Trump's latest tariff threat.
That prompted Washington to label China a currency manipulator for the first time since 1994, sharply escalating the ongoing dispute between the world's two largest economies.
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-- Reuters contributed to this report