Key points:

  • The S&P 500 and Dow Jones Industrial Average reached new all-time highs.
  • A massive stimulus package announced by China became the main driver of rising metal prices.
  • The technology sector as a whole showed positive performance, although individual companies (e.g., Microsoft) experienced declines.

Tuesday marked a new all-time high for the S&P 500 and Dow Jones Industrial Average. The market demonstrated resilience, shrugging off less-than-optimistic consumer confidence data. The growth was driven by mining stocks, which responded to China’s announcement of a large-scale economic stimulus package.

The Dow Jones Industrial Average gained 83.57 points (0.20%), closing at 42,208.22. The S&P 500 rose by 14.36 points (0.25%) to 5,732.93. The Nasdaq Composite also posted gains, climbing 100.25 points (0.56%) to 18,074.52.

China’s impact on the U.S. stock market

Of the eleven sectors making up the S&P 500 index, five posted gains, with the most significant growth seen in the materials sector, which rose by 1.35%.

This performance was driven by rising metal prices, which in turn were fueled by China’s large stimulus package. The package, the largest since the start of the pandemic, aims to combat deflationary trends in the country’s economy. Notable gains were seen in companies involved in copper and lithium mining. For example, Freeport-McMoRan shares increased by 7.93%, Southern Copper by 7.22%, Albemarle by 1.97%, and Arcadium Lithium by 3.2%.

Meanwhile, U.S.-listed shares of Chinese companies also saw gains. Alibaba shares rose by 7.88%, PDD Holdings by 11.79%, and Li Auto by 11.37%. This trend aligns with positive developments in the Chinese domestic market.

The “Big Seven” showed mixed performance

Ultra-high capitalization companies experienced mixed performance during the trading session. While Nvidia shares rose by 3.9%, Microsoft’s market cap declined by 1.15%. Nevertheless, the tech sector as a whole showed positive momentum, gaining 0.79%.

The Philadelphia SE Semiconductor Index, which tracks the performance of semiconductor manufacturers, grew by 1.23%. Shares of key industry players like Qualcomm and Intel increased by 0.54% and 1.11%, respectively.

Meanwhile, Federal Reserve Chair Michelle Bowman expressed concerns that key inflation indicators continue to exceed the Fed’s target of 2%. She noted that the Fed should exercise caution in making decisions on future monetary policy.

Investors are focused this week on data concerning unemployment trends and personal consumption expenditures.

Visa’s stock dropped by 5.49% after the U.S. Department of Justice accused the company of violating antitrust laws. This event negatively impacted the entire financial sector, which lost 0.92% overall.

Trading volume on U.S. exchanges amounted to 11.42 billion shares, slightly below the 20-day average of 11.60 billion shares.