US stock market rallies after latest update in shifting US-China trade war narrative

President Donald Trump said the US and China would hold trade discussions "at a different level'' on Thursday, just days before planned tariff escalations were scheduled to take effect between the two countries.

"There's a talk scheduled for today at a different level," Trump said in a radio interview with Fox News Radio, without giving further information. "Let's see what the end product is."

Asked for clarification on the comment, a White House official told CNBC that "both sides remain in communication at various levels".

The Trump administration's 15 percent tariff on $300 billion in Chinese imports is scheduled to start on Sept 1.

China hopes the United States can cancel the planned additional tariffs to avoid an escalation in the trade war, Gao Feng, a commerce ministry spokesman, told reporters Thursday.

He also said the Chinese and US trade delegations have maintained "effective" communication.

"China has ample means for retaliation, but we think the question that should be discussed now is about removing the additional tariffs on $550-billion Chinese products to prevent escalation of the trade war," Gao told reporters.

"The most important thing at the moment is to create necessary conditions for both sides to continue negotiations," he said during a weekly briefing, adding that China was lodging "solemn representation" with the United States.

The stock market on Thursday climbed after the latest update in the shifting US-China trade war narrative.

The Dow Jones Industrial Average advanced 326.15 points, or 1.3 percent, while the S&P 500 index rose 36.64 points, or 1.3 percent. The Nasdaq Composite Index rose 1.5 percent, to close at 7,973.39.

Some US retailers on Thursday saw their stock hit on the Trump administration's looming 15 percent tariff on $300 billion in Chinese imports that starts on Sept 1.

Shares of Best Buy, a multinational consumer electronics retailer headquartered in Richfield, Minnesota, declined 5.51 percent on Thursday after its second-quarter revenue and same-store sales growth missed analysts' expectations and upcoming tariffs on the company's core products weighed on the stock.

Best Buy CEO Corie Barry said several core products, including televisions, smart watches and headphones, will be hit with the Trump administration's 15 percent tariff on Sept 1. The announcement of a delay in tariffs on Chinese goods on some items will affect computing, mobile phones and gaming consoles, which will see the 15 percent duty on Dec 15.

"There is a bit of art and a bit of science to estimating this and we don't exactly have a precedent for the quantity of moving pieces that we have in place right now," Corie said in a call with analysts. "There's a few things we are trying to take into account here," including exactly which goods are on the list, when they will be implemented, and what rates.

Teen apparel maker Abercrombie stock slumped on Thursday on soft sales and as the company said the tariffs were expected to have a "direct adverse impact" on cost of merchandise and gross profit of about $6 million for the fall season.

To cushion the blow, it said that it has been aiming to cut the amount of goods sourced from China to below 20 percent in fiscal 2019 from 25 percent a year earlier.