US stocks, led by gains in consumer discretionary, technology and industrial stocks, rallied as investors shrugged off escalating trade rhetoric between the United States and China and rebounded from Monday’s selloff. The Dow Jones industrials were up 0.7 percent, the S&P gained 0.5 percent and the Nasdaq was 0.8 percent higher. Stocks gained even though the US/China trade war stepped up. Beijing retaliated against Washington’s move to place new tariffs on a further $200 billion of Chinese imports and placed tariffs on US$60 billion of US goods in retaliation for the new US tariffs. The tariff rates will be levied at 5 and 10 percent, instead of the previously proposed rates of 5, 10, 20 and 25 percent, according to the Finance Ministry.

US stocks declined Monday led by declines in Apple and Amazon. Investors took profits ahead of President Donald Trump's expected announcement of new tariffs on $200 billion of Chinese imports. Beyond trade, investors and analysts say they are looking ahead to next week’s FOMC meeting. The Fed is widely expected to raise short-term interest rates for the third time this year. The Dow Jones industrials were down 0.35 percent, the S&P declined 0.6 percent and the Nasdaq was 1.4 percent lower.