Concerns over Trump’s protectionist trade stance have been playing foul in the stock market. In fact, the escalation of the President’s tariff threat on additional Chinese goods led to a tumultuous Wall Street ride last week. However, the negative sentiments seem to be reversing, given the hopes of fresh talks between the United States and China.

China has welcomed Trump’s invitation to resume trade talks in order to avert a full-blown trade war. The two countries have already placed new taxes on $50 billion in imports on each other’s goods. Washington is preparing to impose 25% duty on $200 billion of Chinese goods, targeting a broad array of Internet technology products and consumer goods from handbags to bicycles to furniture. Further, Trump also threatened to implement tariffs on additional $267 billion of goods on a short notice.

China has vowed to retaliate and put off accepting license applications from American companies in financial services and other industries hoping to operate in the country. The country is also seeking permission from the World Trade Organization (WTO) to impose $7 billion a year in sanctions on the United States in retaliation to Washington’s non-compliance with a recent ruling over U.S. dumping duties.

Given this, the news of fresh trade talks has instilled optimism into the stock market. This coupled with booming economy and strong earnings will help stocks to move higher. The U.S. economy is witnessing the fastest pace of growth in nearly four years with a nearly two-decade low unemployment rate of 3.9% and 18-year high consumer confidence. Historic tax cuts, higher government spending and deregulation are fueling growth.

Additionally, the Fed is on track for gradual rate hikes with the third increase of this year expected as soon as this month. A rising rate scenario also signals a strengthening economy, which will spur growth in the stock market.

While most corners of the market are set to surge, the sectors at risk due to China trade will likely benefit the most. The U.S. information technology, materials, and industrials sectors have relatively high exposure to China’s economy with 14.2%, 7.1%, and 5.6%, respectively, and are poised to perform well in renewed trade talks. In particular, chip stocks dominate the list of tech sector players with large sales exposure to China.