Wall Street bounced back on Tuesday, led by gains in consumer discretionary, technology and industrial stocks as investors shrugged off escalating trade rhetoric between the United States and China. All three major US indexes were higher following Monday's sell-off.

Late Monday, US President Donald Trump had announced the imposition of tariffs on $200 billion in imports from China starting next week, intensifying the volley of trade actions between the world's two largest economies.

China had responded on Tuesday by unveiling tariffs on about $60 billion of US goods, measures set to take effect on September 24, prompting President Trump to threaten additional actions if Beijing targets US agricultural or industrial workers.

“(The trade dispute) has escalated to a point where finally we're probably getting closer to a resolution,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana. “It's almost as if we're getting down to the brass tacks of both countries having not too much more room to go.”

Apple Inc shares were up 0.7 per cent after Chief Executive Tim Cook expressed optimism that the US-China trade dispute will be amicably settled. The iPhone maker's products have so far been spared in the tariff spat.

Fitness gadget-maker Fitbit Inc was also expected to avoid tariffs. Its shares were up 7.2 per cent. Trade-sensitive industrials were trading higher, with Boeing Co shares up 2.4 per cent. The planemaker, the biggest US exporter to China, led the Dow Jones industrial average's advance.

Nike Inc also boosted the blue-chip index, its shares hitting an all-time high after Telsey Advisory Group hiked its price target. The stock was up 2.2 per cent.

The Dow Jones Industrial Average rose 234.32 points, or 0.9 per cent, to 26,296.44, the S&P 500 gained 20.96 points, or 0.73 per cent, to 2,909.76 and the Nasdaq Composite added 78.84 points, or 1 per cent, to 7,974.63. Of the 11 major sectors of the S&P 500, eight were higher.

In addition to consumer discretionary, technology and industrial companies, the energy sector was up 0.8 per cent as crude prices rose on signs that OPEC is not prepared to boost output to address shrinking supplies from Iran.

So-called defensive stocks, including real estate, utilities and consumer staples were lower. Credit card issuers Visa Inc and Mastercard Inc rose 1.1 per cent and 1.9 per cent, respectively, after agreeing to pay $6.2 billion to settle a long-running lawsuit with merchants over fees.

Among losers, Tesla Inc sank 3.9 per cent after disclosing that it had received a request for documents from the US Department of Justice regarding Chief Executive Elon Musk's public statements about taking the company private.

Insurer Marsh & McLennan was down 3.3 per cent on news that it will buy British insurance and reinsurance broker Jardine Lloyd Thompson $5.7 billion. General Mills Inc dropped 7.2 per cent after missing analysts' quarterly sales estimates, extending the packaged food company stock's 25 per cent year-to-date slide.

Advancing issues outnumbered declining ones on the NYSE by a 1.51-to-1 ratio; on Nasdaq, a 1.73-to-1 ratio favoured advancers. The S&P 500 posted 31 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 46 new highs and 71 new lows.

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