By Wall Street’s major indexes posted modest gains on Tuesday, led by a strong performance in mining stocks following China’s unveiling of an expansive stimulus package.
However, concerns about a slowing US economy, coupled with uncertainty surrounding the Federal Reserve’s next policy decision, capped overall market advances.
Initially, the rally lost some momentum after a report from the Conference Board indicated an unexpected dip in US consumer confidence for September, driven by increasing apprehension over the labor market’s health.
Expectations for the Fed’s November meeting have now shifted, with traders leaning toward a 50 basis point rate cut, according to CME Group’s FedWatch Tool, a change from earlier projections that had the odds at an even split.
“We got a little bit of cold water with the consumer confidence number this morning that might add to concerns the Fed may have been a little late,” Reuters reported, quoting Michael James, senior vice president of equity trading at Wedbush Securities.
Both the S&P 500 and the Dow Jones Industrial Average remained near their record highs, continuing their upward trend for the month, fueled by the Fed’s aggressive rate cut earlier and additional support from policymakers.
The Dow Jones Industrial Average (.DJI) edged up by 9.72 points, or 0.02%, closing at 42,134.37, while the S&P 500 (.SPX) added 6.16 points, or 0.12%, to finish at 5,725.17.
The Nasdaq Composite (.IXIC) gained 76.13 points, or 0.42%, closing at 18,050.40.
Among the 11 sectors of the S&P 500, six ended the day in negative territory, but materials stocks (.SPLRCM) bucked the trend, posting a 1.1% increase.
Metals prices surged after China, the world’s second-largest economy, introduced its most extensive stimulus measures since the pandemic to combat deflation.
Copper and lithium mining stocks led the charge.
Freeport-McMoRan (FCX.N) soared 7%, Southern Copper (SCCO.N) gained 6.5%, Albemarle (ALB.N) rose 3%, and Arcadium (ALTM.N) climbed 3.8%.
US-listed shares of Chinese firms also followed the upward trend, with Alibaba (BABA.N) advancing 6.7%, PDD Holdings (PDD.O) surging 10.2%, and Li Auto (LI.O) up by 8.4%, reflecting gains in the domestic Chinese market.
James added:
China’s moves to stimulate their economy are going to add optimism to companies doing extensive business in China and you’re seeing that reflected in some of those stocks.
The tech sector saw mixed results, with Nvidia (NVDA.O) rising 3.5%, while Microsoft (MSFT.O) slipped more than 1%.
The broader technology sector (.SPLRCT) rose by 0.9%, and chipmakers had a strong day, with the Philadelphia SE Semiconductor Index (.SOX) up 1.7%. Qualcomm (QCOM.O) and Intel (INTC.O) both added 1.8%.
Meanwhile, Federal Reserve Governor Michelle Bowman cautioned that inflation remained “uncomfortably above” the central bank’s 2% target, signaling that a careful approach was necessary as the Fed continues to cut interest rates, as reported by Reuters.
Investors are now watching closely for the release of key data, including weekly jobless claims and personal consumption expenditures, which will shape market sentiment for the week.
Among individual stocks, Visa (V.N) fell 4% following a report that the US Department of Justice is planning to file an antitrust lawsuit against the payments giant, alleging that it has monopolized the debit card market.
This development weighed heavily on the financial sector (.SPSY), which declined by 1%.
In broader market action, advancing stocks outnumbered declining ones by a ratio of 1.38-to-1 on the NYSE and 1.13-to-1 on the Nasdaq.
The S&P 500 recorded 52 new 52-week highs and no new lows, while the Nasdaq Composite registered 76 new highs against 69 new lows.
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