US Markets Enjoy Biggest One-day Gains Since 2015 As Trade War Fears Ease

The country's blue-chip indices saw an improved mood following last week's falls, which saw the S&P 500 suffer its worst weekly performance in more than two years.

Instead, the index was up 2.7% on Monday, while the Dow Jones Industrial Average was up 2.9% - its third highest gain in recorded history. Meanwhile, the Nasdaq Composite increased 3.3% as investors flocked back into technology shares.

The turnaround comes as US and Chinese officials held talks yesterday in an effort to de-­escalate the chances of a trade war. US Treasury Secretary, Steven Mnuchin, said talks were ongoing in a bid to stop the trade war comments from escalating further. He said he was "cautiously hopeful" of a truce between the two sides.

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Just last week, trade relations between the countries were tense, but the proposal for some $60bn (£42.5bn) worth of tariffs would not hit the Chinese economy as hard as first anticipated.

Combined with negotiation efforts, this suggested these taxes as well as recent steel and aluminum tariffs could pose some challenges but not warrant a full-blown trade conflict.

Meanwhile, other reports suggest Chinese negotiators were rushing to relax conditions on foreign ownership of the country's firms and tighten up protections for intellectual property, according to The Telegraph.

In other markets, the Euro Stoxx 50 index closed 0.6% lower, driven by a 0.8% fall in Germany's Dax and a 0.6% drop for the French CAC 40.

In local currency terms, the UK's FTSE 100 remains the worst performing European index year-to-date, down 10.4%. This is due to stronger sterling hitting dollar-based earnings for leading blue-chip companies.