By Sue Chang, MarketWatch , Ryan Vlastelica

Geopolitical tensions ease as two Koreas agree to hold summit

U.S. stocks were higher Tuesday in a session marked by swings in and out of negative territory as investors debated the potential impact of a trade war in the wake of President Donald Trump announcing a pair of tariffs, a strategy that has faced opposition from key Republicans like House Speaker Paul Ryan.

What are the main benchmarks doing?

The Dow Jones Industrial Average reversed earlier losses to rise 32 points, or 0.1%, to 24,907. The S&P 500 was up 7 points, or 0.3%, to 2,728. The Nasdaq Composite Index gained 37 points, or 0.5%, to 7,308.

Materials and industrials sectors were leading the market's move north while utilities and consumer staples were lagging.

Equity benchmarks are coming off a rally in the previous session, when they closed more than 1% higher in what some called a technical rebound after a stretch of weakness for equities.

Opinion:This technical chart says the stock market is headed for another big drop (http://www.marketwatch.com/story/this-technical-chart-says-the-stock-market-is-headed-for-another-big-drop-2018-03-05)

What is driving the markets?

Trade continued to be a primary focus for investors, especially as Trump's plan to impose tariffs on steel and aluminum imports showed signs of opposition. Speaker of the House Paul Ryan warned about the potential fallout (http://www.marketwatch.com/story/trump-today-president-says-canada-mexico-steel-tariffs-will-only-come-off-under-fair-nafta-2018-03-05) if Trump pressed ahead--part of a show of resistance by some Republicans to the plan. In addition, Trump himself appeared to show some willingness to be flexible on trade tariffs with Canada and Mexico, if they agreed to a "fair" North American Free Trade Agreement.

Stocks have recently been pressured by the prospect of more protectionist trade policies, a headwind that contributed to heavy losses in the major U.S. indexes last week.

In a positive development, South Korea's presidential office said that North and South Korea would hold their first summit in more than a decade in late April (http://www.marketwatch.com/story/north-south-korea-officials-will-hold-summit-in-april-reports-2018-03-06). That comes after North Korean leader Kim Jong Un met with a senior delegation from the South in Pyongyang and said he wanted to "write a new history of national reunification" for the two countries.

The reports said Pyongyang would suspend weapons testing during the summit and would be open to talks with the U.S. about scrapping nuclear weapons and normalize ties.

Read:Here's what the 30 Dow industrials companies say about a potential trade war (http://www.marketwatch.com/story/heres-what-the-30-dow-industrials-companies-said-about-a-potential-trade-war-2018-03-02)

What are strategists saying?

Strategists well versed in Korean affairs played down the significance of the attempted rapprochement on the Korean Peninsula, given that such breakthroughs have failed to lead to a lasting detente.

"I think [Kim Jong Un] is buying himself some time because they are feeling the pinch of sanctions. But no way he is actually going to 'de-nuke.' So he extends a false olive branch to catch his breath," said Ian Winer, head of the equities division at Wedbush Securities. "The next time he launches or retaliates to U.S. drills, he can say: 'I tried to talk.'"

"It was hard to evaluate what negative impact the Korea situation was having on the market, if any, but the possibility of war risk in Asia was the biggest uncertainty out there, and [the summit] could help eliminate that. Even if the risk seemed remote, that's a net positive for the market," said George Schultze, a hedge-fund manager and founder of Schultze Asset Management.

"Meanwhile, it seems like investors are starting to suspect that Trump's tariff announcement could just be an opening gambit in his renegotiations over Nafta, so the threat may not be as bad as some are fearing."

Despite that, he noted that "we've already seen a big run" in equities, suggesting further gains at current levels may be difficult to come by absent new positive news.

What's on the economic docket?

A group of Federal Reserve speakers will be watched by investors. Dallas Fed President Rob Kaplan said he still expects three interest-rate increases this year, and that he wants to get started soon. Recent volatility in the market has come as investors fret that inflation could be returning to the economy, and that the Fed could have to become more aggressive in combating such a scenario. However, most investors interpret a more aggressive stance as four rate increases this year.

After the market close, Fed Gov. Lael Brainard will speak on the economy and monetary policy at the Money Marketeers Forum in New York at 7 p.m. Eastern. Later, Kaplan will take part in a moderated discussion at CERA Week, an annual energy conference, in Houston at 8:30 p.m. Eastern.

Read:Trump, trade wars, inflation: Wall Street on edge ahead of February jobs report (http://www.marketwatch.com/story/trump-trade-wars-inflation-wall-street-on-edge-ahead-of-february-jobs-report-2018-03-03)

Which stocks are in focus?

Target Corp.(TGT) fell 4.5% despite reporting quarter revenue (http://www.marketwatch.com/story/targets-same-store-sales-beat-estimates-2018-03-06) that came in ahead of analyst expectations.

Qualcomm Inc.(QCOM) is on track for its longest slide in nine months (http://www.marketwatch.com/story/qualcomm-shares-fall-on-track-for-longest-losing-streak-in-nine-months-2018-03-06), falling 3.8%. The Department of Treasury is looking into the company's request to review Broadcom Ltd.'s (AVGO) hostile takeover bid amid concerns over potential national security risks. Shares of Broadcom were up 1.4%.

Read:Qualcomm meeting on hold, but Broadcom drama still heats up (http://www.marketwatch.com/story/qualcomm-meeting-on-hold-but-broadcom-drama-still-heats-up-2018-03-05)

United Parcel Service Inc. (UPS) rose 3.4% after Stifel Nicolaus upgraded the stock (http://www.marketwatch.com/story/upss-stock-jumps-after-analyst-upgrade-on-valuation-dividend-yield-2018-03-06), citing its valuation and dividend yield.

Marinus Pharmaceuticals Inc.(MRNS) slumped 13% after it reported a 2017 loss that was wider than expected (http://www.marketwatch.com/story/marinus-pharma-shares-slide-14-premarket-after-company-posts-wider-than-expected-loss-2018-03-06).

CommerceHub Inc. (CHUBA) agreed to be bought by private-equity firm Sycamore Partners in a cash deal valued at $1.1 billion (http://www.marketwatch.com/story/commercehub-to-be-bought-out-by-sycamore-in-a-deal-valued-at-11-billion-2018-03-06). The stock spiked 23%.

International Paper Co.(IP) shares dropped 2.3% after the company indicated that it will continue to pursue a potential buyout of Smurfit Kappa Group PLC (http://www.marketwatch.com/story/international-paper-ready-to-discuss-smurfit-bid-2018-03-06) even after the Irish packaging company rejected its initial overture.

How are other markets performing?

European stocks were firmly higher (http://www.marketwatch.com/story/european-stocks-march-higher-as-fears-of-trade-wars-abate-2018-03-06) and Asian markets jumped across the board (http://www.marketwatch.com/story/asian-markets-jump-back-to-life-after-days-of-declines-2018-03-05), led by a 2% rise for the Hong Kong Hang Seng Index .

In other assets, the ICE Dollar Index dropped 0.5% to 89.63, while crude was flat at $62.55 a barrel and gold prices settled higher.

--Barbara Kollmeyer contributed to this article

(END) Dow Jones Newswires

March 06, 2018 15:21 ET (20:21 GMT)