Bank stocks also fell sharply. The S&P 500 dropped by 69.53 points, or 2.41 percent, to 2,811.87. The Nasdaq rose 49 points, or 0.6%, to 7,696.
"The reason we're seeing this recovery is because fundamentals haven't changed", said Kevin Miller, CIO at E-Valuator Funds.
Global markets are recovering after Monday's rout, down in Asia but rising in Europe and pointing up in NY.
"That being said, we are going through something that we've never gone through before", Miller said.
The euro rose to $1.1236 from $1.1223.
"The impact on the Chinese economy would be significant, potentially pulling China's GDP a couple of percentage points lower". The stocks of Apple Inc. slumped 5.8 percent and chipmaker NVIDIA fell 6.1 percent. The euro held steady at $1.1231.
The US is also considering increasing tariffs on all the remaining goods it buys from China, estimated to be valued at around $300bn.
North American markets rallied Tuesday after enduring a deep hit to start the week due to the escalating U.S.
"I have a feeling it's going to be very successful", he said. "Now who knows what has to be accomplished before a deal can be reached?"
"It could be very bad", O'Rourke added.
Wall Street sank on Monday after China defied Washington by announcing retaliatory tariffs, the latest salvo in the two countries' increasingly belligerent trade war, sending investors fleeing equities for less risky assets. The list of targeted goods ranges from TV cameras to tequila, and includes a range of agricultural products.
Trump last week imposed a 25 percent tariff on $200 billion of Chinese imports to the USA and said he had begun plans to hit more than $300 billion in other Chinese goods.
In New York, the Dow Jones industrial average was up 207.06 points at 25,532.05, a day after losing 617.38 points. The Nasdaq dropped 3.4%, its biggest one-day loss of 2019.
However, while there is a lot of fear about an all-out trade war, which could batter the world economy, both said talks will continue, though no date has been set for the next round.
"Obviously, it may create some distortion in the market and this is what we want to avoid".
Senate Majority Leader Mitch McConnell said on Tuesday that "nobody wins a trade war" but he hoped Trump's tactics in negotiations China would put the United States in a better position to move talks forward with Beijing.
Communications companies were also higher.
Though on Monday, Mr Trump said that he had "not made a decision" on whether to go ahead with those additional levies.
In another pair of tweets on May 14, Trump said the United States could "make a deal with China tomorrow", and pointed to the Chinese regime's reversal. The red portion on US tariff levels represents new tariffs that President Trump already put into place in 2018. Investors are concerned about reduced consumption due to higher prices, retaliatory tariffs on US exports, and disrupted supply chains.
Mike Wilson, Morgan Stanley's chief USA equity strategist, told clients in a note Monday that higher us tariffs on Chinese goods will likely turn into a a headwind for corporate earnings - and the economy could fall into a recession if the country's trade war keeps escalating.