Stocks rise, shrugging off U.S.-China trade war
Once again, Wall Street’s jitters over the escalating trade dispute between the United States and China proved to be short-lived.
U.S. stocks closed solidly higher Tuesday as investors largely brushed off the Trump administration’s decision to impose tariffs on an additional $200 billion worth of Chinese goods. China’s swift response, saying it will increase tariffs on $60 billion worth of U.S. goods, also didn’t dampen investors’ buying mood.
“The tariffs, they kind of came in as expected, but there’s been this ongoing hope that this eventually will get resolved,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank.
Gains by technology and consumer-focused firms’ stocks powered Tuesday’s broad rally, which reversed nearly all of the indexes’ Monday losses.
Bond yields climbed, sending bank stocks higher. Energy stocks rose along with crude oil prices.
The Standard & Poor’s 500 index rose 15.51 points, or 0.5%, to 2,904.31. The Dow Jones industrial average climbed 184.84 points, or 0.7%, to 26,246.96. The Nasdaq composite climbed 60.32 points, or 0.8%, to 7,956.11. The Russell 2000 index of smaller-company stocks rose 7.42 points, or 0.4%, to 1,710.97.
Technology stocks accounted for much of the market’s gains. Chip maker Micron Technology climbed 4% to $45.33.
Apple, which received an exemption to the new tariffs on goods imported from China, rose 0.2% to $218.24.
Fitbit jumped 6.4% to $5.80. Some components that the company uses to manufacture its fitness-monitoring bands were not among the items subject to the new tariffs.
Gains by consumer-focused companies also helped lift the market. Netflix rose 4.9% to $367.65.
Investors also had their eye on corporate earnings reports.
Cereal maker General Mills and package delivery giant FedEx declined sharply after reporting quarterly results that fell short of Wall Street’s forecasts. General Mills shares slumped 7.6% to $44.13. FedEx dropped 5.5% to $241.58.
Tesla slid 3.4% to $284.96 after Bloomberg reported that the maker of electric cars is being investigated by the U.S. Justice Department over public statements made by Chief Executive Elon Musk. Early last month Musk tweeted that he had secured funding to take the company private. A couple of weeks later, he put out a statement saying the go-private deal was off.
Oil prices climbed ahead of an upcoming meeting where OPEC members will weigh how to address the loss of supply from Iran, which faces U.S. sanctions. Benchmark U.S. crude climbed 1.4% to $69.85 a barrel in New York. Brent crude, used to price international oils, rose 1.3% to $79.03 a barrel in London.
The rise in oil prices helped lift energy stocks. Marathon Oil shares climbed 3% to $21.50.
Bond prices fell. The yield on the 10-year Treasury rose to 3.05% from 3%. That’s the highest level since May 22, when the yield hit 3.06%.
The dollar rose to 112.35 yen from 111.18 yen. The euro weakened to $1.1667 from $1.1686.
Gold slipped 0.2% to $1,202.90 an ounce. Silver fell 0.3% to $14.19 an ounce. Copper surged 3% to $2.73 a pound.
Heating oil climbed 1.3% to $2.24 a gallon. Wholesale gasoline rose 1.4% to $2 a gallon. Natural gas jumped 4.2% to $2.93 per 1,000 cubic feet.
2:30 p.m.: This article was updated with closing prices, context and analyst comment.
1:25 p.m.: This article was updated with the close of markets.
This article was originally published at 9:40 a.m.
Your guide to our new economic reality.
Get our free business newsletter for insights and tips for getting by.
You may occasionally receive promotional content from the Los Angeles Times.