Stocks closed broadly higher Thursday on Wall Street for the third-straight day, led by solid gains in technology companies and banks.
The S&P 500 index rose 25.36 points, or 0.9%, to 2,876.32. The Dow Jones industrial average climbed 214.66 points, or 0.8%, to 25,862.68. The index was briefly up 309 points.
The Nasdaq composite gained 75.90 points, or 1%, to 7,898.05. The Russell 2000 index of small company stocks picked up 8.97 points, or 0.6%, to 1,557.24.
Major stock indexes in Europe finished higher.
The latest gains extend the market's turnaround from the start of the week, when stocks dived as the trade conflict between the U.S. and China escalated, stoking investors' fears about the fallout for the global economy and corporate profits.
Traders have since been encouraged by signals that Washington and Beijing are still planning to continue negotiations. And they've found relief in reports indicating that the U.S. is backing away from raising tariffs on auto imports from Europe and is making progress on lifting steel tariffs in North America.
"While we've seen a heightened rhetoric between the U.S. administration and the Chinese, we haven't seen a significant global escalation at this point, so there's a little bit of a relief in that," said Eric Wiegand, senior portfolio manager for Private Wealth Management at U.S. Bank.
The S&P 500 is now up 2.3% from its close on Monday, when the benchmark index slumped after China issued retaliatory tariffs on U.S. goods, ratcheting up tensions between the two largest economies in the world.
The market has still not recovered all its losses since early last week, when President Donald Trump turned up the heat in the trade war by threatening to increase tariffs on $200 billion worth of Chinese imports from 10% to 25%. The S&P 500 is still down about 1.9% from its close on May 6.
The S&P 500, Dow and Nasdaq are still on track to end the week with losses, even after the three-day winning streak.
The Trump administration raised tariffs May 10 and spelled out plans to target the $300 billion worth of Chinese imports that aren't already facing 25% taxes. The escalation covers everything from sneakers to toasters to billiard balls. The Chinese have retaliated by imposing tariffs on $60 billion in U.S. imports.
The escalation in trade tensions surprised investors who had been expecting a resolution. That confidence was a key component of the stock market's sharp gains so far this year.
Stocks have been choppy the past two weeks as traders worried over the implications the escalating trade dispute could have for markets. Negotiations between the two countries are expected to resume in Beijing soon. And Trump has said that he expects to meet Xi in late June at the G-20 summit in Osaka, Japan.
The market will likely remain volatile until investors can get a better sense of how the U.S. and China will resolve their trade dispute, said Liz Ann Sonders, chief investment strategist at Charles Schwab.
Technology stocks, health care companies and banks accounted for much of the market's broad gains Thursday.
Not all technology sector stocks had a good day. Chipmakers slumped a day after the Trump administration labeled Chinese telecommunications equipment giant Huawei a security risk and imposed export curbs on U.S. technology sales to the company. The move hurts U.S. chipmakers, which sell products to Huawei, which is the biggest global maker of switching equipment for phone companies.
Business on 05/17/2019