The S&P 500 rose for a third straight day on Tuesday as investors hoped for progress in trade talks between the U.S. and China. The index closed up 0.55% at 6,038.81, while the Dow Jones Industrial Average added 105.11 points, or 0.25%, to end at 42,866.87. The Nasdaq Composite gained 0.63% to settle at 19,714.99.
U.S. Commerce Secretary Howard Lutnick expressed optimism about the ongoing discussions in London, saying, “I think the talks are going really, really well. Everyone is working closely and with a lot of effort.” Investors are closely watching for a deal that avoids high tariffs between the two countries. Stocks have rallied in June, driven by positive corporate earnings and a revival in technology stocks, bolstered by recent advancements in artificial intelligence.
However, some investors worry that existing tariffs could increase inflation in the near future. HSBC strategists predicted potential upward movement in the near term but cautioned about medium to long-term challenges.
Trade talks drive market optimism
Morgan Stanley expressed confidence in Duolingo’s potential, while D.A. Davidson remained critical of CoreWeave after the company issued a recent financing structure. The home construction sector had a strong day, with an ETF tracking home construction names jumping more than 2% by midday. Toll Brothers and PulteGroup each rose over 5%.
Several companies experienced notable movements during the day. Topgolf surged 5%, Insmed soared over 26% following positive study results, and J.M. Smucker fell 13% after its fourth-quarter revenue missed expectations. Wells Fargo issued a note on Tesla, predicting the stock might face pressure due to weakening fundamentals in its core automotive business.
OpenAI struck a deal with Google’s cloud service to enhance its computing capacity for ongoing AI development. The stock market trends reflect optimism regarding U.S.-China trade talks, strong corporate earnings, and advancements in technology sectors. However, concerns about tariff-driven inflation and the long-term valuation of U.S. equities remain prevalent among investors.
