Dow surges 450 on news that U.S. will delay some tariffs

A rare respite in the U.S.-China trade war abruptly lifted U.S. markets out of their slump Tuesday, after the Office of the U.S. Trade Representative announced that tariffs on consumer goods like laptops, cellphones and toys will be delayed until Dec. 15.

The move to temporarily shield certain products from the latest round of tariffs on $300 billion in Chinese goods, which is scheduled to take effect Sept. 1, will offer some relief for companies and consumers that were bracing for costly trade-related burdens during the holiday shopping season.

"I have said a number of times that Trump could turn this market with a tweet, and he has," said Ivan Feinseth of Tigress Financial Partners. "Only this time, the president went through his trade representative, who said the U.S. would back off its September deadline on new tariffs. Those are consumer-related and have been delayed until December."

In a matter of minutes, the Dow Jones industrial average leaped more than 500 points, starting from negative territory and swinging up more than 2 percent. The Standard & Poor's 500 index was up 2 percent after the announcement, and the tech-heavy Nasdaq, which houses a great deal of U.S. companies with exposure to China, was up nearly 2.5 percent.

Apple, which manufactures most of its products in China, was up nearly 4.5 percent after the delay was announced. Electronics giant Best Buy was up more than 8.5 percent, while toy makers Mattel and Hasbro both saw their shares soar more than 5 percent. Footwear juggernaut Nike, which also depends heavily on China, was up nearly 3 percent.

Nine of 11 stock market sectors were positive, with real estate and utilities the only laggards.

The sudden swing offers the first glimmer of hope after a nightmarish stretch for markets. August is historically one of the worst months of the year for stocks.

The Dow was 5 percent below its July 15 all-time high coming into Tuesday. The blue chip average dropped 390 points on Monday on continuing fears that Hong Kong protests, falling worldwide bond yields and the ongoing U.S.-China trade dispute could exacerbate a global recession.

Tuesday's stock market surge came after a turbulent week and a report Tuesday morning that inflation may beginning to raise its head. July's consumer price index rose 0.3 percent, the Labor Department reported Tuesday. The rise was above the 0.2 percent that experts expected.

Markets have been roiled in recent weeks from a number of sources including fears of a currency war with China, massive protests in Hong Kong, an escalation of the U.S.-China trade war and an investor flight to bonds.

Goldman Sachs released a report last weekend calling for lower economic growth in the U.S. due to the ongoing U.S. -China trade battle. Goldman also predicts that the U.S. and China will not resolve its trade disagreements before the 2020 election, further clouding the economic picture.