U.S. stock markets closed higher on Thursday as market participants weighed the outcome of the U.S.-China trade talks. A softer-then-expected key inflation data and a weak labor market data bolstered investors’ sentiment. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.2% or 101.85 points to close at 42,967.62. Notably, 19 components of the 30-stock index ended in positive territory and 11 finished in negative zone. The tech-heavy Nasdaq Composite finished at 19,662.48, advancing 0.2% due to strong performance of technology bigwigs.
AI-based semiconductor giants like NVIDIA Corp. NVDA and Broadcom Inc. AVGO rose 1.5% and 1.3%, respectively. Both stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 gained 0.3% to finish at 6,045.26. Wall Street’s most observed benchmark is currently less than 2% away from its all-time high. Seven out of 11 broad sectors of the broad-market index ended in positive territory while three in negative zone and one remained unchanged.
The Utilities Select Sector SPDR (XLU) and the Technology Select Sector SPDR (XLK) rose 1.2% and 0.9%, respectively. On the other hand, the Communication Services Select Sector SPDR (XLE) fell 0.8%.
The fear-gauge CBOE Volatility Index (VIX) was up 4.4% to 18.02. A total of 23.5 billion shares were traded on Thursday, higher than the last 20-session average of 18 billion. The S&P 500 recorded 12 new 52-week highs and 3 new 52-week lows. The Nasdaq registered 54 new 52-week highs and 63 new 52-week lows.
Investors Weigh U.S.-China Trade Talk
The United States and China reached an agreement for trade and tariffs in London. U.S. Commerce Secretary Howard Lutnick said “We have reached a framework to implement the Geneva consensus and the call between the two presidents.” This was echoed by Li Chenggang, China’s international trade representative and a vice minister at China’s Commerce Ministry.
President Donald Trump said that the deal with China is “done, subject to final approval with President Xi and me.” U.S. was seeking confirmation that China would restore critical mineral (rare earth) exports. Beijing protested against the U.S. Commerce Department’s warnings to U.S. chipset manufacturers against using Chinese semiconductors. On May 12, the United States and China have decided to for a 90-day pause of tariff implementations.
Economic Data
The Department of Labor reported that initial claims remained flat at 248,000 for the week ended Jun 7, higher-than the consensus estimate of 246,000. Previous week’s data was revised marginally upward by 1,000 from 247,000 reported earlier.
Continuing claims (those who have already received government aids and reported a week behind) increased 54,000 to 1.956 million. This is the highest level for insured unemployment since Nov 13, 2021. Previous week’s data was revised downward by 2,000 to 1.904 million.
The Department of Labor reported that the producer price index (PPI) increased 0.1% in May, less-than-the consensus estimate of 0.2%. The metric for April was revised upward to a decline of 0.2% from a drop of 0.5% reported earlier. Year over year, PPI increased 2.6% in May.
Core PPI (excluding volatile food and energy items) increased 0.2% in May, less-than-the consensus estimate of 0.3%. The metric for April was revised downward to 0.3% from 0.4% reported earlier. Year over year, core PPI increased 2.7% in May.
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