Wall Street ends higher on tech boost, easing tariff tensions
NEW YORK: US stocks closed higher on Thursday, rallying for a third straight day with a solid boost from technology shares as investors parsed a mixed bag of corporate earnings and watched for signs of progress in the US-China tariff stand-off.
All three major US stock indexes posted sharp gains, with the "magnificent seven" group of artificial intelligence-related megacaps, boosted by AI-powered software firm ServiceNow's better-than-expected quarterly results, giving the Nasdaq the edge.
Beijing called for cancellation of US tariffs on Chinese goods, following comments from US Treasury Secretary Scott Bessent signaling the White House could be willing to de-escalate trade tensions that have whipsawed markets for weeks.
Easing tariff rhetoric is "part of the reason why you're seeing the chips lead because they've been kind of in the bull's eye in (the trade dispute) between China and the US," said Paul Nolte, senior wealth advisor & market strategist at Murphy & Sylvest in Elmhurst, Illinois. "So any cooling of tariff talks between the two countries bolsters the technology sector as a whole."
"There's still a ton of questions around tariffs right now that we really don't have answers to," Nolte added. "So a lot of us are just kind of throwing darts in the dark."
As first-quarter earnings season hits full stride, the extent to which trade war uncertainties have affected business and consumer sentiment is making itself known.
Procter & Gamble, PepsiCo, Chipotle Mexican Grill and American Airlines all cut or withdrew forecasts due to elevated uncertainty among consumers.
Shares for Procter & Gamble slid by 3.7 per cent and PepsiCo tumbled 4.9 per cent.
Not all guidance was downbeat.
ServiceNow's profit was better than analysts expected due to resilient demand for AI-powered software. Its shares jumped 15.5 per cent.
Hasbro's results beat expectations, helped by the strength of its gaming segment, sending the toymaker's shares up 14.6 per cent.
Of the 157 companies in the S&P 500 that have reported so far, 74 per cent have beaten expectations, and analysts currently believe aggregate S&P 500 earnings growth of 8.9 per cent year-on-year, up from 8.0 per cent as of April 1, according to LSEG.
On the data front, stronger-than-expected new orders for durable goods and rangebound jobless claims painted a picture of economic resilience.
The Dow Jones Industrial Average rose 486.83 points, or 1.23 per cent, to 40,093.40, the S&P 500 gained 108.91 points, or 2.03 per cent, to 5,484.77 and the Nasdaq Composite gained 457.99 points, or 2.74 per cent, to 17,166.04.
Alphabet shares rose in extended trading after the Google parent beat quarterly revenue estimates.
Of the 11 major sectors of the S&P 500 all but consumer staples advanced, with technology shares enjoying the largest percentage gains, up 3.5 per cent.
Advancing issues outnumbered decliners by a 5.84-to-1 ratio on the NYSE. There were 50 new highs and 30 new lows on the NYSE.
On the Nasdaq, 3,401 stocks rose and 1,005 fell as advancing issues outnumbered decliners by a 3.38-to-1 ratio.
The S&P 500 posted 4 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 40 new highs and 51 new lows.
Volume on US exchanges was 14.95 billion shares, compared with the 19.15 billion average for the full session over the last 20 trading days.
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