US stocks opened higher on Tuesday on signs of easing tensions in the Korean Peninsula and mounting pressure against potentially damaging metals tariffs proposed by President Donald Trump.
North Korea is willing to hold talks with the United States on denuclearization and will suspend nuclear tests while those talks are under way, the South said on Tuesday after a delegation returned from the North after meeting leader Kim Jong Un.
Trump, in the first US response, said on Tuesday: “We will see what happens.”
After two days of turning to safe-havens such as gold and Japanese yen, investors poured into riskier assets.
Six of the 11 major S&P sectors were higher, led by gains in the information technology and energy.
The market is recovering from a bout of concern over the possibility of a global trade war following remarks by Trump last week.
“When geopolitical environment is improving, there’s very much a risk-on sentiment,” said Fiona Cincotta, senior market analyst at City Index in London.
“I would not say that trade war fears are completely erased … there are doubts that Trump will actually manage to push the trade tariffs through.”
Investor fears were eased after Trump’s threat of hefty tariffs on aluminum and steel was seen as a negotiating tool following his tweet on Monday that Canada and Mexico could avoid the tariffs if they ceded ground in the North American Free Trade Agreement (NAFTA) talks.
Top US Republicans, including House Speaker Paul Ryan, urged Trump on Monday not to go ahead with the tariffs.
“There’s also a lot of pressure regarding the tariff – not only GOP, trading partners but also many business leaders in the United States,” said Peter Cardillo, chief market economist at First Standard Financial in New York.
By 9:33 a.m. ET, the Dow Jones Industrial Average was up 0.34 percent at 24,960.38.
The S&P 500 gained 0.31 percent to 2,729.28 and the Nasdaq Composite rose 0.42 percent to 7,361.41.
Federal Reserve Bank of Dallas President Robert Kaplan told CNBC the base case on interest rate hikes has not changed and remains at three for the year, adding that the United States is either at or beyond full employment now.
Last month’s US payrolls report showed wages growing at their fastest pace in more than eight years, fueling concerns that both inflation and interest rates would rise faster than expected that led to a steep selloff.
Investors are keenly waiting for the upcoming February jobs data due on Friday to gauge the strength of the labor market.
Target shares slipped 2.3 percent after the big-box retailer reported lower-than-expected profit for the holiday quarter.
Advancing issues outnumbered decliners on the NYSE by 1,863 to 591. On the Nasdaq, 1,608 issues rose and 625 fell.