LIVE MARKETS-US stock traders stay optimistic that tariffs will be smaller than feared

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U.S. STOCK TRADERS STAY OPTIMISTIC THAT TARIFFS WILL BE SMALLER THAN FEARED

Optimism that tariffs will be much smaller than initially feared continued to propel stocks on Tuesday before the United States was due to enter into new talks with China and other countries over trade deals.

Stocks have been boosted in recent weeks by deals with China and the European Union to delay tariff increases as they negotiate trading terms. Trump has since accused China of violating a trade deal, but investors remain optimistic that the worst case for trade levies will be avoided.

Equity analysts at Deutsche Bank expect President Donald Trump's administration to continue to relent on tariffs if they create large negative economic impacts.

The White House said on Tuesday that it is actively monitoring China's compliance with last month's tariff agreement, in response to questions on how it is handling Beijing's curbs on rare earth minerals. Trump is expected to speak with Chinese President Xi Jinping this week.

The U.S. has also asked countries to make their best offers on trade negotiations by Wednesday as U.S. officials ramp up efforts to deliver multiple agreements to Trump before a self-imposed deadline just five weeks away.

Investors are also watching progress on a tax and spending bill in Congress, which has run into opposition among some Republicans that say it doesn’t cut enough spending.

Elon Musk also on Tuesday amplified his criticism of the bill, calling it a "disgusting abomination" that will increase the deficit.

The Nasdaq Composite .IXIC was the best performing major index, ending up 0.8%. The S&P 500 .SPX rose 0.6% and Dow Jones Industrial Average .DJI increased 0.5%. Tech .SPLRCT led sector gainers, while communication services .SPLRCL was the weakest group.

Here is Tuesday’s closing market snapshot:

(Karen Brettell)

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