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Is the Trump trade back? After several jittery sessions — which led to the Dow’s longest losing streak since 2011 — investors are rotating back towards risky assets and away from havens.

The S&P 500 index was up 0.6 per cent in mid-day trading to 2,355.3, the Dow Jones Industrial Average climbed by the same margin to 20,669.3 and the Nasdaq Composite rose 0.4 per cent to 5,862.5.

Financials led the way higher, representing a reversal from recent days. The sector climbed 1.3 per cent, with banks up 1.5 per cent. Materials, energy and industrials, all sectors that are seen as sensitive to the overall economy, also posted solid gains.

On the opposite end of the spectrum, defensives like utilities and healthcare pulled back. Treasury bonds faced selling pressure, which sent the yield on the 10-year note up 2.1 basis points to almost 2.4 per cent.

In currencies, the US dollar rose 0.3 per cent against a basket of six global currencies.

Investors remained focused on Washington, where Republicans in the House of Representatives failed last week to push through plans to repeal and replace Obamacare. The initial reaction was bearish, with expectations swelling that other Trump initiatives, like lower taxes, would not pass. That anxiety appeared to have eased on Tuesday.

“The abandoned health vote was a clear political setback for the Trump Administration and congressional Republicans,” said Alec Phillips, an economist at Goldman Sachs.

“However, we do not think it presents as much of a fiscal setback as some have argued, because the health bill and tax bill would have dealt with different aspects of the tax code and because it never seemed very likely that health legislation would produce much net savings”.

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