(NEW YORK) — Stocks jumped Tuesday after Chinese President Xi Jinping said Beijing would reduce tariffs on imported cars and improve intellectual property protection, steps that could ease trade tensions. Facebook climbed as CEO Mark Zuckerberg testified before the Senate about the company’s privacy scandal.
Xi’s proposals could help the U.S. and China resolve their differences and avert a trade dispute that slows down global commerce. The dialing back of tensions helped send the price of crude oil up 3.3 percent.
“The market’s increasing expectation is that the two sides will sit down now,” said Paul Christopher, head of global market strategy for Wells Fargo Investment Institute, although stocks could bounce around as those negotiations proceed. “There’s still a lot at stake because you have a global supply chain that could be interrupted because of tariffs.”
Facebook, Twitter and Snap rallied as Senators questioned Mark Zuckerberg about the Cambridge Analytica privacy scandal that has engulfed the company over the last four weeks. Technology companies have stumbled as investors wondered if the government will implement tighter regulations on technology companies, and those worries eased Tuesday. Zuckerberg will testify before the House of Representatives Wednesday.
The S&P 500 index surged 43.71 points, or 1.7 percent, to 2,656.87. The Dow gained 428.90 points, or 1.8 percent, to 24,408. Shortly before noon it rose as much as 532 points. The Nasdaq composite added 143.96 points, or 2.1 percent, to 7,094.30. The Russell 2000 index of smaller-company stocks advanced 28.97 points, or 1.9 percent, to 1,543.43.
Indexes overseas also climbed. Germany’s DAX jumped 1.1 percent and the British FTSE 100 gained 1 percent. The French CAC 40 gained 0.8 percent. Japan’s benchmark Nikkei 225 gained 0.5 percent and South Korea’s Kospi added 0.3 percent while Hong Kong’s Hang Seng added 1.7 percent.
Speaking at a business conference, Xi promised changes in some areas that the U.S. has identified as priorities. He didn’t address other thorny topics including requirements for foreign companies to give technology to potential local competitors.
General Motors rose 3.3 percent to $39.07 and Tesla climbed 5.2 percent to $304.70.
Technology companies have made some of the biggest swings on the market during the trade spat. If trade conditions get worse, they might face higher costs as well as lower sales. They’ve also done better than most other parts of the market for more than a year, and companies like Apple, Microsoft and Google’s parent Alphabet have made up an outsize portion of the market’s gains.
Apple jumped 1.9 percent to $173.25 and Microsoft rose 2.3 percent to $92.88.
So far the U.S. has proposed tariffs on at least $150 billion worth of products made in China, and China has said it could put tariffs on $50 billion in goods imported from the U.S. Christopher, of Wells Fargo, said the U.S. still has a lot of leverage because it has mostly targeted products that are only partly assembled in China.
“The U.S., in the next round of tariffs, could start targeting goods that the Chinese do mostly produce themselves,” he said. That would cause China more economic pain.
Facebook CEO Mark Zuckerberg appeared before two Senate committees that comprised almost half the Senate and was questioned about the Cambridge Analytica scandal. As many as 87 million users were affected, and Facebook started notifying them this week.
Facebook rallied 4.5 percent to $165.04 and made big gains during Zuckerberg’s testimony. Twitter jumped 5.3 percent to $29.53 and Snap gained 2.3 percent to $14.48. While Tuesday was the best day for Facebook stock in two years, it is down 11 percent since the scandal emerged in March.
Benchmark U.S. crude rose 3.3 percent to $65.51 a barrel in New York. Brent crude, used to price international oils, added 3.5 percent to $71.04 a barrel in London. Oil prices have bounced up and down recently as investors wonder if the trade dispute will hamper global economic growth.
Exxon Mobil added 2.9 percent to $77.07 and Marathon Oil jumped 4.3 percent to $17.06.
VeriFone Systems surged after it agreed to be bought by Francisco Partners and British Columbia Investment Group. The investment group will pay $23.04 a share, or $2.54 billion, for VeriFone, which makes terminals for electronic payments. VeriFone stock climbed 51.9 percent to $22.78.
Bond prices turned lower. The yield on the 10-year Treasury note rose to 2.80 percent from 2.78 percent.
In other energy trading, wholesale gasoline rose 2.9 percent to $2.04 a gallon. Heating oil added 3.4 percent to $2.06 a gallon. Natural gas lost 1.4 percent to $2.66 per 1,000 cubic feet.
Gold rose 0.4 percent to $1,345.90 an ounce. Silver added 0.4 percent to $16.60 an ounce. Copper climbed 1.9 percent to $3.14 a pound.
The dollar climbed to 107.17 yen from 106.78 yen. The euro rose to $1.2361 from $1.2322.