U.S. stocks closed higher on Tuesday as optimism over ongoing trade discussions between the United States and the Chinese mainland boosted investor confidence. The positive sentiment fueled hopes for progress in easing global economic tensions.
The Dow Jones Industrial Average rose by 105 points, or 0.25%, to close at 34,867. The S&P 500 gained 33 points, or 0.55%, settling at 4,538, while the Nasdaq Composite Index climbed 124 points, or 0.63%, ending the day at 14,715.
Gains were broad-based, with most of the primary S&P 500 sectors finishing in the green. Energy and consumer discretionary stocks led the advance, rising 1.77% and 1.19%, respectively.
“Investors are optimistic that the trade talks will lead to a reduction in tariffs and a boost in global trade activity,” said Jay Woods, chief global strategist at Freedom Capital Markets. “This positivity is reflected in the market’s upward movement.”
Tesla shares surged 5.67% on Tuesday, extending a rebound that began earlier this week following a recent sell-off. Other major technology stocks also ended the day higher. Alphabet and Meta Platforms each gained more than 1%, while Apple rose 0.61%, recovering modestly after a dip on Monday.
Despite the market’s recent strength, the World Bank issued a cautionary note on the U.S. economic outlook, highlighting risks posed by trade uncertainty. In its updated forecast, the bank projected U.S. economic growth to slow in the coming years.
Some strategists are also cautious about the longer-term picture. Analysts at HSBC noted that while global equities may continue climbing over the next three months, the outlook beyond that appears more uncertain. “Medium term, the risk/reward is looking more unbalanced, with markets trading near their highs and recession fears appearing largely priced out,” strategist Alastair Pinder wrote in a note Tuesday.
