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 gained 0.63% to settle at 19,714.99. The Dow Jones Industrial Average added 105.11 points, or 0.25%, to close at 42,866.87.
The Nasdaq Composite climbed 0.55% to end at 6,038.81. U.S. Commerce Secretary Howard Lutnick expressed optimism about the discussions taking place in London. “I think the talks are going really, really well.
We’re very much spending time and effort and energy – everybody’s got their head down working closely,” Lutnick told reporters. Traders are watching for signs of a deal that avoids high tariffs. Last month, both nations agreed to work on resolving their trade issues after President Donald Trump announced broad, steep levies on imports.
Strong corporate earnings and a revival in tech stocks, especially after recent AI announcements, have boosted investment sentiment. “Technically, shares have been on a nice run eclipsing key levels to get back on track,” said Jay Woods, chief global strategist of Freedom Capital Markets.
Trade talks boost S&P gain
Some investors worry the current tariffs could push inflation higher and weigh on stocks. “While the picture is not completely clear, enforceable tariffs exist,” said Mark Malek, chief investment officer of Siebert Financial. “The Fed is concerned that the real inflationary effects have not yet shown up.”
HSBC believes global stocks may move higher in the near term but face challenges later.
Morgan Stanley thinks investors are underestimating Duolingo’s potential. D.A. Davidson remains critical of CoreWeave’s stock after its recent financing structure announcement. An ETF tracking home construction names jumped over 2% in midday trading, its best one-day gain since May 12.
Lennar and DR Horton led the fund. Insmed surged more than 26% on positive study results, while J.M. Smucker fell 13% after missing revenue estimates. Wells Fargo said Tesla could face pressure due to weakening fundamentals in its core auto business.
OpenAI finalized a deal with Google’s cloud service in May to support its computing needs. The stock market continues to show resilience amid hopes for U.S.-China trade talks, strong earnings, and a tech sector revival. However, inflation concerns and long-term valuation sustainability remain potential challenges for investors.