Both Beijing and Washington expressed optimism about trade negotiations between the world’s two largest economies, even as a US Navy mission in the disputed South China Sea provoked China’s anger.
Investors are also preparing for another potential government closure after talks broke down between the main parties over whether to limit the number of migrants authorities can detain.
Meanwhile, first-quarter 2019 profit growth expectations have diminished after fourth-quarter earnings growth is now estimated at 16.5%, up from 15.8% at the beginning of the year.
Of the 11 major S&P sectors, only communications services, utilities and healthcare closed in the red.
Tariff-sensitive industrial stocks provided the biggest lift to the S&P 500, led by Union Pacific Corp, General Electric Co and FedEx Corp, among others.
Healthcare stocks were the biggest drag on the Dow, pulled down by UnitedHealth Group Inc and Pfizer Inc and Merck & Co, each down more than 1%.
Shares of Tesla Inc added 2.3% after Cannacord Genuity upgraded the stock to “buy” from “hold.” Apple Inc edged 0.6% lower after industry research firm IDC said in a report that iPhone sales in China fell by 20% in the fourth quarter.
Restaurant Brands International Inc. shares gained 1.6% after the parent company of Burger King reported profit and same-store sales growth above Wall Street expectations.
Morgan Stanley shares fell 1.5% after the bank announced the acquisition of Canada-based Solium Capital Inc. in a deal valued at $900 million.
In Asia, shares saw gains in morning trade on Tuesday, while Wall Street had a tepid session as geopolitical uncertainty continue to weigh on investors.
The mainland Chinese markets were mostly higher in early trade. The Shenzhen component rose 0.20% while the Shanghai composite dipped slightly.
Japan’s Nikkei 225 added 1.71%, while the Topix gained 1.61%. South Korea’s Kospi was slightly higher, edging up 0.15%. The ASX 200 in Australia recovered from its earlier dip to go up 0.3% in afternoon trade.