Investing.com - The S&P 500 closed higher on Tuesday as softer-than-expected tariffs imposed by the U.S. and China put the brakes on the prospect of a full-blown trade war, prompting a wave of buying across stocks.
The latest merry-go-round in the U.S.-China trade dispute did little to suggest that a full-blown trade war near. Both nations' trade salvos were less harsh than many heard feared.
China said it will impose new tariffs on U.S. goods worth $60 billion on Sept. 24, but levies would be instituted at lower rates than had been expected, according to a Reuters report. China's tariff rate on a list of 5,207 U.S. products will range between 5% and 10%, below the previously touted 10% to 20% rate.
The announcement arrived after the Trump administration announced the U.S. will impose 10% tariffs on $200 billion in Chinese goods next week. Those duties will more than double to a rate of 25% on Jan. 1.
"As before, we estimate the direct effects of these tariffs on Chinese export volumes and GDP to be low," Goldman Sachs said.
With the United States only set to hike up the levies in 2019, some suggested there was ample opportunity for the both nations to seek a resolution.
President Donald Trump and Chinese counterpart Xi Jinping are slated to meet in November.
A rebound in tech, also lifted the broader averages higher as bargain-seeking investors swooped in on beaten-up tech stocks, which had come under pressure Monday.
Shares of Apple (NASDAQ:AAPL) and Fitbit (NYSE:FIT) posted gains for the day. Both were helped by easing fears over loss of revenues from smartwatches and Bluetooth devices -- two items, among others, that were scrubbed off the list of products subject to levies.
Rising energy stocks, fuelled by a sharp uptick in oil prices, also led the broader market higher, as investor expectations for tighter global crude output received a boost.
On the New York Mercantile Exchange, crude futures for November delivery rose 1.4% to settle at $69.85 a barrel.
On the corporate news front, Tesla (NASDAQ:TSLA) shares slumped after the electric automaker confirmed the U.S. Department of Justice was investigating Chief Executive Elon Musk's public statements in August, in which he claimed to have secured funding to take the company private.
General Mills (NYSE:GIS) stock, meanwhile, also saw sharp losses amid a mixed fiscal first-quarter report as earnings topped estimates, but revenue fell short. And FedEx (NYSE:FDX) stock slumped 5.5% after its quarterly profit missed consensus.
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