Stocks opened higher on Tuesday as tech shares climbed, but the gains in the broader market were capped as China retaliates against tariffs slapped by the U.S.
The Dow Jones Industrial Average rose 31 points as Chevron and DowDuPont outperformed. The S&P 500 and Nasdaq Composite both gained 0.2 percent.
Shares of Amazon, Netflix and Google-parent Alphabet all rose by at least half a percent. Meanwhile, Apple share gained 0.1 percent.
China’s tariffs will go into effect on Sept. 24 and will target more than 5,000 U.S. products. The announcement comes after the Trump administration announced the U.S. will impose 10 percent tariffs on $200 billion worth of Chinese imports, and those duties will rise to 25 percent at the end of the year.
Commerce Secretary Wilbur Ross said the new tariffs are aimed at modifying China’s behavior and leveling the playing field for U.S. companies there. China is “out of bullets” to retaliate, Ross told CNBC’s “Squawk Box.”
The tariffs from both countries come after multiple news outlets reported U.S. officials were trying to restart U.S.-China trade talks.
“At least for now, instead of getting us closer to the bargaining table with China, we’ve only pushed them further away as they are likely canceling their trip to the US,” said said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
The announcements also come after National Economic Council Director Larry Kudlow told CNBC’s Becky Quick that Trump has “not been satisfied” with the trade talks with Beijing.
Boeing and Caterpillar both traded about 0.1 percent higher in the premarket, paring earlier gains.
Fears of escalating trade tensions between the U.S. and China have knocked equities off of record highs set last month. The S&P 500 and Nasdaq Composite set all-time highs to end August. This month, however, both indexes are down 0.4 percent and 2.6 percent, respectively, through Monday’s close.