Stocks on Wall Street closed broadly higher Thursday for the third straight day, led by solid gains in technology companies and banks.
The gains extend the market’s rebound since the start of the week, when escalation in the U.S.-China trade war stoked investors’ fears about the fallout for the global economy and corporate profits and led to a sell-off.
Traders have since been encouraged by signals that Washington and Beijing still plan to continue negotiations. And they’ve found relief in reports indicating that the United States is backing away from raising tariffs on auto imports from Europe and is making progress on lifting steel tariffs in North America.
“While we’ve seen a heightened rhetoric between the U.S. administration and the Chinese, we haven’t seen a significant global escalation at this point, so there’s a little bit of a relief in that,” said Eric Wiegand, senior portfolio manager for Private Wealth Management at U.S. Bank.
The Standard & Poor’s 500 index rose 25.36 points, or 0.9%, to 2,876.32. The Dow Jones industrial average advanced 214.66 points, or 0.8%, to 25,862.68.
The Nasdaq composite climbed 75.90 points, or 1%, to 7,898.05. The Russell 2000 index of small company stocks ticked up 8.97 points, or 0.6%, to 1,557.24.
The S&P 500 is now up 2.3% from its close Monday, when the benchmark index slumped after China issued retaliatory tariffs on U.S. goods, which ratcheted up tensions between the two largest economies in the world.
The market has still not recovered all its losses since early last week, when President Trump turned up the heat in the trade war by threatening to raise tariffs on $200 billion worth of Chinese imports to 25% from 10%. The S&P 500 is still down about 1.9% from its May 6 close.
The S&P 500, Dow and Nasdaq are still on track to end the week with losses, even after the three-day winning streak.
The Trump administration raised tariffs last Friday and spelled out plans to target the $300 billion worth of Chinese imports that aren’t already facing 25% taxes. The escalation covers a wide variety of goods, including sneakers, toasters and billiard balls. China has retaliated by raising tariffs on $60 billion worth of U.S. imports.
The escalation in trade tensions surprised investors who had been expecting a resolution. That confidence was a key component of the stock market’s sharp gains so far this year.
Stocks have been choppy the last two weeks as traders worried over the implications the escalating trade dispute could have for markets. Negotiations between the two countries are expected to resume in Beijing soon. And Trump has said that he expects to meet Xi in late June at the G-20 summit in Osaka, Japan.
The market will probably remain volatile until investors can get a better sense of how the U.S. and China will resolve their trade dispute, said Liz Ann Sonders, chief investment strategist at Charles Schwab.
“Clearly, the market is at the mercy of what we’re hearing on trade,” she said.
Technology firms, healthcare companies and banks accounted for much of the market’s broad gains Thursday.
Cisco Systems jumped 6.7% — the biggest gainer in the S&P 500 — after the tech firm posted quarterly earnings that beat Wall Street expectations and issued a solid forecast for the current quarter.
Chipmakers slumped Thursday, the day after the Trump administration labeled Chinese telecom equipment giant Huawei a security risk and imposed export curbs on U.S. technology sales to the company. The move hurts U.S. chipmakers, which sell products to Huawei, which is the biggest global maker of switching equipment for phone companies.
The S&P Semiconductor and Semiconductor Equipment index slid 1.6%. Several chipmakers lost ground. Qorvo tumbled 7.1%, Micron Technology lost 2.9% and Qualcomm dropped 4%.
Banks and other financial services companies got a boost from higher bond yields, which enable them to charge higher interest rates on loans. JPMorgan Chase shares rose 1.3%. American Express rose 1.9%. Bank of America gained 1.1%
The yield on the 10-year Treasury rose to 2.39% from 2.38%.
The higher yields followed a Commerce Department report showing that U.S. home construction in April rose faster than expected by economists.
The solid report follows a series of weak economic reports released Wednesday that shoved bond yields sharply lower and weighed down the entire financial sector.
The home construction data also gave home builders a lift. Taylor Morrison Home climbed 2.4%. KB Home rose 2.2%.
Walmart rose 1.4% after the retail giant reported a surge in a key sales measure, driven by a growing grocery sales business. The company also said that online sales rose 37%, and that higher tariffs would lead it to raise prices.
The world’s largest retailer also beat Wall Street’s profit forecasts. It has been working to get more people into its stores and use its online shopping service. It recently launched next-day delivery as it faces tougher competition from other retailers and Amazon.
Energy futures finished higher. Benchmark U.S. crude rose 1.4% to $62.87 a barrel. Brent crude, the international standard, rose 1.2% to $72.62 a barrel.
Wholesale gasoline climbed 2.4% to $2.06 a gallon. Heating oil rose 1.8% to $2.12 a gallon. Natural gas rose 1.5% to $2.64 per 1,000 cubic feet.
Gold fell 0.9% to $1,286.20 an ounce. Silver dropped 1.8% to $14.54 an ounce. Copper rose 0.2% to $2.75 a pound.