BIARRITZ, FRANCE - AUGUST 26: (L-R clockwise from bottom L) British Prime Minister Boris Johnson, Canadian Prime Minister Justin Trudeau, German Chancellor Angela Merkel, French President Emmanuel Macron, South African President Cyril Ramaphosa, European Council President Donald Tusk, Italian Prime Minister Giuseppe Conte, Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi attend a working lunch during G7 summit on August 26, 2019 in Biarritz, France. The French southwestern seaside resort of Biarritz is hosting the 45th G7 summit from August 24 to 26. High on the agenda will be the climate emergency, the US-China trade war, Britain's departure from the EU, and emergency talks on the Amazon wildfire crisis. (Photo by Dylan Martinez - Pool/Getty Images)
Pool/Getty Images Europe/Getty Images
BIARRITZ, FRANCE - AUGUST 26: (L-R clockwise from bottom L) British Prime Minister Boris Johnson, Canadian Prime Minister Justin Trudeau, German Chancellor Angela Merkel, French President Emmanuel Macron, South African President Cyril Ramaphosa, European Council President Donald Tusk, Italian Prime Minister Giuseppe Conte, Japanese Prime Minister Shinzo Abe and Indian Prime Minister Narendra Modi attend a working lunch during G7 summit on August 26, 2019 in Biarritz, France. The French southwestern seaside resort of Biarritz is hosting the 45th G7 summit from August 24 to 26. High on the agenda will be the climate emergency, the US-China trade war, Britain's departure from the EU, and emergency talks on the Amazon wildfire crisis. (Photo by Dylan Martinez - Pool/Getty Images)
Now playing
02:05
Kosik: Some traders skeptical about China G7 phone call
Now playing
04:56
How these startups are tackling high drug costs in the US
WASHINGTON, DC - MARCH 09: Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Musk answered a range of questions relating to SpaceX projects during his appearance at the conference. (Photo by Win McNamee/Getty Images)
Win McNamee/Getty Images
WASHINGTON, DC - MARCH 09: Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Musk answered a range of questions relating to SpaceX projects during his appearance at the conference. (Photo by Win McNamee/Getty Images)
Now playing
04:19
Bitcoin and crypto's 'Elon Musk problem'
Now playing
02:29
'Outrageous' used car prices amid highest inflation in 13 years
jeff bezos blue origin space launch cooper intv sot vpx_00021804.png
jeff bezos blue origin space launch cooper intv sot vpx_00021804.png
Now playing
03:05
Jeff Bezos reveals most surprising part of space mission
CNN
Now playing
03:05
These moms explain how child tax credit checks will help them
CNN/John General/Atom Smasher
Now playing
04:04
Here's everything you need to know about ransomware
Now playing
04:04
Subway CEO on menu changes: The one thing we did not touch is our tuna
Now playing
02:40
Gretchen Carlson tells Anderson about the bipartisan bill she's backing to help workers
Rachael Flores
Now playing
02:22
Employees go viral after resigning via Burger King sign
Virgin Galactic
Now playing
02:05
Richard Branson lands safely after rocketing to outer space
CNN/Shutterstock
Now playing
02:20
Prices are going up on almost everything. Here's why
A car drives by a Speedway gas station next to the Shell refinery on March 03, 2021 in Martinez, California. Gas prices have increased across the United States to a national average of $2.72 per gallon, an increase of 30 cents from one month ago. Gas in California has an average price of $3.68 per gallon, the highest in the nation.  (Photo by Justin Sullivan/Getty Images)
Justin Sullivan/Getty Images
A car drives by a Speedway gas station next to the Shell refinery on March 03, 2021 in Martinez, California. Gas prices have increased across the United States to a national average of $2.72 per gallon, an increase of 30 cents from one month ago. Gas in California has an average price of $3.68 per gallon, the highest in the nation. (Photo by Justin Sullivan/Getty Images)
Now playing
04:01
Gas prices are high. Here's why
Now playing
02:46
The US needs construction workers
BetterUp CEO Alexi Robichaux workplace mental health orig_00023111.png
BetterUp CEO Alexi Robichaux workplace mental health orig_00023111.png
Now playing
03:06
This CEO says leaders need to focus on mental health to boost productivity at work
A driver uses the Didi Chuxing ride-hailing app on his smartphone while driving along the street in Beijing on July 2, 2021. (Photo by Jade GAO / AFP) (Photo by JADE GAO/AFP via Getty Images)
Jade Gao/AFP/Getty Images
A driver uses the Didi Chuxing ride-hailing app on his smartphone while driving along the street in Beijing on July 2, 2021. (Photo by Jade GAO / AFP) (Photo by JADE GAO/AFP via Getty Images)
Now playing
02:13
Didi shares plummet after China bans it from app stores
New York CNN Business —  

The Dow and the broader stock market finished sharply higher on rebound Monday, reversing course from Friday’s selloff after President Donald Trump said China wants to get back to the negotiating table.

The Dow (INDU) closed 1.1% higher, some 270 points. All 30 Dow (INDU) stocks finished Monday higher.

The S&P 500 (SPX) finished 1.1% higher and the Nasdaq Composite (COMP) closed up 1.3%. Both the S&P and the Nasdaq had closed lower in the previous two sessions.

All three stock indexes ended Friday in the red, logging their fourth down-week in a row.

Optimism about a possible trade deal between the United States and China held steady throughout the day.

First, China’s Vice Premier Liu He said Monday that an escalation of the trade war would be bad for all parties and “the interest of the people in the world,” while Trump said at the G7 summit in France “I think we’re going to make a deal.”

Then, during a press conference at the summit Monday, Trump added that the United States will only make a trade deal with China if it is “fair” and “good”.

He said a meeting with Iran in the near term is also possible.

That also helped some of the European bourses higher, and the German Dax (DAX) and the French CAC 40 (CAC40) closed higher. UK markets are closed for the summer bank holiday.

The trade spat between the world’s two largest economies escalated Friday, when China announced new tariffs on $75 billion worth of US imports. Trump tweeted his frustration in response to the tariffs and sent the stock market lower. After Friday’s closing bell, Washington announced a new round of tariffs on Chinese imports starting October 1.

Those $250 billion goods currently hit with a 25% levy, will be taxed at 30%, while the remaining $300 billion worth of imports will be hit with a 15% tariff instead of 10%.

Despite the trade war tensions, one economic indicator showed the US economy remains resilient: Durable goods orders for July climbed 2.1% on the month, much more than expected. Excluding transportation, the orders are up 0.4%.

But that was counterbalanced with the Chicago Fed National Activity Index, which slipped further in July. It was down 0.4% compared with a flat reading in June. A negative index number represents below-trend growth.

“We believe the Chicago Fed National Activity Index remains the best indicator to gauge US recession risks,” wrote Win Thin, global head of currency strategy at Brown Brothers Harrison, in a note to investors.