US stocks have rebounded on Tuesday, boosted by gains in industrial shares following reports of renewed trade negotiations between the United States and China.
Both the S&P 500 and the Dow Jones Industrial Average posted their biggest monthly percentage gains since January, when markets hit peak levels.
The markets were buoyed by a Bloomberg report that US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are exploring ways to cool down the tariff war brewing between the world's two largest economies.
The trade-sensitive industrial sector led the S&P 500 and the Dow industrials higher, rising 2.1 per cent a day after a broad sell-off in technology stocks pulled markets lower.
"It's a little bit of buying the dip. We've seen it before," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
"What has happened in the past is ... the market would rebound three or four weeks later and hit all-time highs again."
Apple Inc shares were up over two per cent in aftermarket trading after posting results that topped Wall Street expectations, driven by sales of higher-priced iPhones.
The US Federal Reserve meets this week and is expected to leave interest rates unchanged, but robust economic data and rising inflation will likely keep it on track for two more rate hikes this year.
The Dow Jones Industrial Average rose 108.36 points, or 0.43 per cent, to 25,415.19, the S&P 500 gained 13.69 points, or 0.49 per cent, to 2,816.29 and the Nasdaq Composite added 41.79 points, or 0.55 per cent, to 7,671.79.
The second-quarter reporting season remains in full swing, and analysts now expect second-quarter profits for S&P 500 companies to have increased 22.9 percent from last year, up from the 20.7 increase seen on July 1.
Drugmaker Pfizer Inc beat second-quarter estimates but lowered its full-year revenue forecast. The stock closed up 3.5 per cent.
CBS Corp reversed its slide, rising 2.7 per cent after Les Moonves survived as the company's chief executive following the board's decision to select an outside counsel to investigate claims of sexual harassment.
