Stocks bounced back from their worst day in months on Tuesday as President Donald Trump reiterated China still wanted to ink a trade deal with the US, allaying some of the market’s fears over rising tensions between the world’s two largest economies.

In a series of tweets on Tuesday morning, Mr Trump said “When the time is right we will make a deal with China”. He went on to say a deal “will all happen, and much faster than people think!”. However he also said while his “respect and friendship with President Xi is unlimited”, any agreement must also “be a great deal for the United States or it just doesn’t make any sense.”

His slightly more optimistic remarks come after China hit back on Monday with its own retaliatory tariffs on about $60bn worth of US goods and sharply escalated the trade war between the two countries.