Dow Is Rising After Tech Earnings, Trump-Xi Meeting
When it rains, it pours.
After weeks of relatively little in the way of hard numbers, Wall Street is now juggling a gauntlet of major earnings reports, lower China tariffs, and concerns about a December rate cut.
The Dow Jones Industrial Average was up 313 points, or 0.7%. The S&P 500 was down 0.2%. The Nasdaq Composite fell 0.8%.
Of the Big Tech firms that reported results last night, Meta Platforms was the big loser with a 11.6% drop. That stock isn’t in the Dow, which is also less exposed to other Magnificent Stocks because it weighs its members by stock price rather than market cap.
Market breadth was actually solid. Roughly 380 stocks in the S&P 500 were on the rise. Financials, real estate, industrials, utilities, consumer staples, health care, and energy were the leading sectors. Consumer discretionary, tech, and communication services were all struggling.
The yield on the 2-year Treasury note was up to 3.62% as traders adjusted bets on a December rate cut. Odds of such a move rose to 72.8% from 66.6% in the immediate wake of Fed Chairman Jerome Powell’s hawkish comments; they were still down from north of 90% prior to the meeting.
President Donald Trump and China’s Xi Jinping seemed to lower the temperature on trade, bringing down the average tariff rate on Chinese goods to 47% from 57%.
China agreed to keep the flow of rare earth materials going and announced plans to purchase soybeans, energy, and other farm products. Trump also said he plans to visit China in April.
“The AI trade remains the focal point…the higher rate regime from the Fed could derail some of the bullishness of equities but it looks like the China relationship is steady in the near term,” writes Andrew Brenner, head of international fixed income at NatAlliance Securities.