U.S. stock indexes closed higher on Tuesday, with notable gains led by Nvidia and other chipmakers. This surge in technology stocks was underpinned by investor optimism around potential progress in U.S. trade negotiations. The White House announced that President Donald Trump and Chinese President Xi Jinping are expected to speak this week, raising hopes for a breakthrough in trade relations. The anticipation of this dialogue, following Trump’s recent accusation that China violated trade agreements, has contributed to a more positive market outlook despite Beijing’s denial of wrongdoing.
Mixed Economic Signals Emerge While Key Stocks Show Varied Reactions to News
The Trump administration is pushing for countries to present their best trade offers by Wednesday in an effort to fast-track agreements ahead of a five-week deadline. Market analysts highlighted that avoiding the implementation of severe tariffs was key to preventing a recession.
Investors found reassurance in the U.S. government’s active engagement with multiple trading partners, including China, the UK, Japan, and the EU. This engagement has helped renew confidence in the global economy and prompted a rally in riskier assets such as tech stocks.
Chip Stocks Power Market Gains as U.S.-China Trade Hopes Lift Sentiment Despite Mixed Economic DataTechnology stocks, particularly in the semiconductor sector, played a significant role in boosting the market. Nvidia rose 2.9% amid expectations that upcoming U.S.-China talks could benefit the company, which has limited access to the Chinese market. Broadcom surged 3.2% after announcing shipments of its latest networking chip, designed to accelerate AI capabilities.
The S&P 500 gained 0.58%, the Nasdaq rose 0.81%, and the Dow Jones increased 0.51%, reflecting broad market strength. The positive sentiment was also fueled by speculation that chip-related discussions would be central to Trump and Xi’s talks.
Economic Data Sends Mixed Signals as Key Stocks React to Market Developments
Despite the upbeat market performance, economic data signaled mixed trends. A U.S. Labor Department report showed an increase in job openings but also a rise in layoffs, indicating a cooling labor market. Factory orders dropped by 3.7% in April, a reversal from the previous month’s gains, suggesting that earlier gains driven by pre-tariff buying are fading. Investors are now looking ahead to Friday’s jobs report for more clarity on how ongoing trade uncertainty is affecting the U.S. economy.
Several individual stocks made notable moves. Wells Fargo gained after the Federal Reserve lifted a $1.95 trillion asset cap imposed in 2018. Kenvue dropped 6% following warnings of retail destocking in the U.S. and China due to tariff uncertainty.
Dollar General jumped 15.8% after raising its annual sales forecast, while Pinterest rose 3.8% on an upgrade from JPMorgan. Reddit dipped 1.1% amid a service outage. Market breadth was strong, with advancing stocks outnumbering decliners across both the NYSE and Nasdaq, and many stocks posting new 52-week highs.
