Bank of America Corp. (BAC - Get Report) and other financial-company stocks rebounded from their worst week in two years, as concerns eased that the U.S. might face a full-blown trade war with China, the world's second-largest economy.

The PowerShares KBW Bank Portfolio (KBWB - Get Report) , an exchange-traded fund tracking shares of large U.S. banks, rose 2% Monday, outpacing a 1.1% rise in the broader Standard & Poor's 500 Index of U.S. stocks. Last week, the bank-focused ETF fell 8.3% in the biggest drop since January 2016, as President Donald Trump announced $50 billion of tariffs on Chinese imports.

Stocks tumbled last week on concern that Trump's tariffs might lead to retaliation from China's leaders, potentially escalating into a trade war that could damp global economic growth. The largest U.S. banks are big providers of finance for imports and exports, and their overall lending and trading businesses are closely tied to the health of the global economy.

Treasury Secretary Steven Mnuchin told Fox News on Sunday that the Trump administration is in talks with the Chinese to resolve disagreements over trade.   

Among the largest banks, Bank of America rallied the most, with a 2.3% gain Monday following a 9.3% drop last week. JPMorgan Chase & Co. (JPM - Get Report) , the biggest U.S. bank, rose 2.1% after falling 7.3% last week. And Citigroup Inc. (C - Get Report) rose 1.1% following a 7.6% slide last week.

Year-to-date, bank stocks are still beating the broader market, with the PowerShares ETF down 1.1% in 2018, versus a 2.3% decline for the S&P 500.