The U.S. Trade Representative said Tuesday that it will delay applying additional tariffs on China-made goods until December, just minutes after China said it held telephone talks with officials in Washington.

The USTR said it will delay tariffs on several items in the basket of $300 billion in consumer goods that are made in China and sold in the United States, which were set to rise to 10% on September 1, until at least December 15. Cell phones, video game consoles, certain toys and footwear will get the short term exemption, the USTR said, and will publish a list of the tariff lines affected on its website later today.

"Certain products are being removed from the tariff list based on health, safety, national security and other factors and will not face additional tariffs of 10 percent," the USTR said. "USTR intends to conduct an exclusion process for products subject to the additional tariff."

The Dow Jones Industrial Average surged more than 500 points on the news, lead by a 3.8% gain for Apple Inc. (AAPL) - Get Report , before trimming the advance to around 420 points by late morning. The U.S. dollar rose 1.58% against the yuan bring the currency under the $7 mark for the first time in more than a week, and benchmark U.S. 10-year Treasury bond yield retraced earlier declines to trade at 1.685%.

The S&P was marked 1.6%, or around 53 points higher, at 2,928.7 points, while the tech-focused Nasdaq Composite rose1.9% to just over 8,015 points.

European stocks also rebounded into the final half hour of trading, reversing earlier declines with a 1% swing to lift the Stoxx 600 0.7% and Frankfurt and Britain's FTSE 100 rising 0.32% in London.

President Donald Trump seemed to indicate the trade detente was linked to China's agreement on agricultural purchases, but provided no further detail in a Tuesday Tweet that followed news of the USTR statement.

The USTR decision followed a statement from China that trade official Liu He conducted a telephone call with Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin on Tuesday evening, adding it had "lodged solemn representation" on U.S. tariff proposals. Further talks are scheduled for later this month, the statement said.

Apple is one of the most trade-sensitive stocks in the U.S. market, given its reliance on China for around a fifth of its revenues and much of its global supply chain.

The USTR said Apple's Hompod and its Apple Watch will remain on the September 1 list, however, paring earlier gains for the tech giant.

Earlier this spring, Goldman Sachs analysts pegged the downside risk to Apple's earnings, based on its China exposure, at around 29%, adding that a move to restrict iPhone production in China would force it to move elsewhere, but cautioned that would take time and hurt profits.

Retail and consumer shares were also on the march, with Nike NKE rising 1.5% and Walmart rising 2.32% as investors reacted to changes in the USTR's tariff basket, which is heavily-focused towards items such as games, toys, clothes and shoes.

The SPDR S&P Retail ETF, one of the most active funds focused on the U.S. retail sector, rose 1.6% following the USTR statement.

Earlier this month, the National Retail Federation said it was disappointed that the Trump administration is "doubling-down on a flawed tariff strategy tat is already slowing U.S. economic growth, creating uncertainty and discouraging investment," while the Retail Industry Leaders Association lobby said the move would cause "a direct hit on consumer products and family budgets."

More than 40% of all clothing -- and nearly 70% of all footwear -- purchased in the United States is made in China, according to the American Apparel & Footwear Association.