Stocks on Wall Street notched broad gains Wednesday as investors drew encouragement from China’s move to exempt some U.S. products from a recent round of tariffs.
Technology, healthcare and communication services stocks powered much of the rally. The benchmark Standard & Poor’s 500 index, which had been essentially flat since Friday, is on track for its third straight weekly gain.
Bond yields continued to climb. Oil prices fell, and investors also continued to favor smaller-company stocks.
Wednesday’s push into technology stocks marked a reversal from the prior two days, when traders bid up energy, financials and other sectors that had sold off in recent weeks. The tech sector is particularly sensitive to fallout from the U.S.-China trade war because many big companies, such as Apple, manufacture products in China.
“Today you have a little bit of a rotation back,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “You’re getting some movement that trade may not be as bad as we think, with China relieving some of the restrictions on its own tariffs.”
The S&P 500 rose 21.54 points, or 0.7%, to 3,000.93. It’s the first time the index has finished above 3,000 points since July 30.
The Dow Jones industrial average rose 227.61 points, or 0.8%, to 27,137.04. The tech-heavy Nasdaq advanced 85.52 points, or 1.1%, to 8,169.68.
The Russell 2000 index of smaller-company stocks outpaced the broader market, jumping 32.72 points, or 2.1%, to 1,575.71.
Bond prices fell. The yield on the 10-year Treasury rose to 1.75% from 1.70%.
The trade war has roiled financial markets this summer. Investors worry that the effects of tariffs and a slowing global economy could tip the United States into a recession. The economic uncertainty has also become a drag on companies.
Some of those trade concerns appeared to ease Wednesday after China said it will exempt American industrial grease and some other U.S. goods from tariff increases, though it kept in place penalties on soybeans and other major U.S. exports.
The move could indicate that both sides are settling in for an extended conflict even as they prepare for talks in Washington next month.
Investors continue to expect the Federal Reserve will cut interest rates at its meeting next week to help maintain U.S. economic growth. In July, the central bank lowered its benchmark interest rate by a quarter of a point. That was its first cut in a decade.
The Russell 2000 index has jumped this week, boasting a 4.7% gain so far. The smaller companies it is made up of are viewed as more insulated from the effects of volatile swings in the U.S.-China trade war. They are also less affected by a stronger U.S. dollar than multinational companies.
“The stronger dollar does tend to mean domestic companies that are wholly domestic are going to do better,” Haworth said.
The S&P 500 is up 0.7% for the week, and the Nasdaq is up 0.8%. The Dow is slightly stronger, with a 1.3% gain.
Apple was among the big gainers Wednesday as investors snapped up technology stocks. Shares in the iPhone maker, which unveiled new products and services Tuesday, climbed 3.2%. Chipmaker Intel gained 1.9%.
Healthcare and communications stocks also made strong gains. Medtronic rose 1.1%. AT&T climbed 3.1%.
The financial sector wobbled between small gains and losses after pulling out of an early slide. Wells Fargo added 1.1%. Real estate stocks finished flat.
Tobacco giants Altria Group and Philip Morris International rose after a brief slide following the Trump administration’s announcement that it is looking to ban most flavors used in e-cigarettes. Altria, which has taken a roughly $13-billion stake in vaping giant Juul, rose 1.1%. Philip Morris gained 0.8%.
Traders also weighed a mixed batch of corporate earnings and outlooks Wednesday.
Oracle shares declined 3.1% in after-hours trading after the company announced that its CEO is taking a leave of absence for health reasons.
GameStop plunged 9.8% after the video game retailer slashed its full-year profit forecast following a disappointing second quarter. The company continues to struggle as it competes with online game sellers.
Dave & Buster’s Entertainment dropped 4.6% after the restaurant and arcade operator cut its sales forecast for the year. The company is facing increased competition.
RH, the owner of furniture company Restoration Hardware, rose 5.1% after its latest quarterly results topped Wall Street’s expectations. The company also raised its financial forecast for the year.
Benchmark crude oil fell $1.65 to $55.75 a barrel. Brent crude oil, the international standard, fell $1.57 to $60.81 a barrel. Wholesale gasoline fell 2 cents to $1.57 a gallon. Heating oil fell 3 cents to $1.90 a gallon. Natural gas fell 3 cents to $2.55 per 1,000 cubic feet.
Gold rose $4.10 to $1,494.40 an ounce.