Stocks rebounded on Tuesday, clawing back most of Monday’s losses despite the escalating new trade war between the U.S. and China.

China hit back against American tariffs that went into effect Tuesday morning, deviating from Mexico and Canada, which each struck a deal with the Trump administration to delay new tariffs. Among Beijing’s retaliations are levies on some American goods, an antitrust probe into Google and Chinese mineral export restrictions.

Yet, investors seemed mostly unfazed. 

The Nasdaq Composite led Tuesday’s gains, climbing 1.4%. The Dow Jones Industrial Average gained about 134 points, or 0.3%, and the S&P 500 added 0.7%. 

Stocks took a hit midday—after a U.S. official said that President Trump and Chinese President Xi Jinping wouldn’t speak on Tuesday—but were back to trading at session highs just a little bit later. A U.S. official said that Trump and Xi could speak on Wednesday.

Trump has called the China tariffs “an opening salvo” and indicated that the U.S. will levy substantial tariffs against China if the countries can’t come to an agreement.

“There is the thought process that some of this is grandstanding, and it will not live throughout the duration of [Trump’s] term,” said Shams Afzal, managing director at Carnegie Investment Counsel. 

The Cboe Volatility Index—Wall Street’s so-called fear gauge, which measures expected market volatility—fell to roughly 17 on Tuesday, around its average level over the past year.

Some of the stocks that were hammered on tariff fears earlier in the week recovered. Shares of General Motors, FedEx and Polaris gained. Oil refinery giants Marathon Petroleum and Valero Energy jumped 6.7% and 5%, respectively.

The yield on the benchmark 10-year Treasury note fell to 4.511%, down from 4.542% on Monday.

U.S. oil prices recovered from their lows on the day, but still finished down about 0.6% to $72.70 a barrel. Bitcoin prices fell below $100,000.

A strong earnings season has also helped keep stocks aloft, says Gina Bolvin, president of Bolvin Wealth Management Group. Companies in the S&P 500 have reported a 16.3% growth in fourth-quarter earnings so far this season, according to FactSet.

Shares of Palantir Technologies climbed 24% after the company on Monday reported strong top-line growth and said demand for AI products remains robust.

Shares of Alphabet gained ahead of its quarterly earnings due after the close.