- Market finishes up after report of possible delay to Mexico tariff implementation
- S&P 500, Nasdaq notch third-straight day of gains
- Dow books longest daily win streak since March
U.S. stocks closed solidly higher Thursday, following after reports that Trump administration is considering delaying a planned 5% tariff on all imports from Mexico, as discussions continue over how to stop the flow of Central American migrants to the U.S. border.
How did the benchmarks perform?
The Dow Jones Industrial Average rose 181.10 points, or 0.7%, at 25,720.66, representing its longest string of gains since March 18, according to Dow Jones Market Data. The S&P 500 index meanwhile, rose 17.34 points, or 0.6% to 2,843.49, while the Nasdaq Composite Index added 40.08 points, or 0.5%, to reach 7,615.55.
Each of the major benchmarks spent time in the red Thursday, with the Dow fall 21.52 points or 0.1% lower to 25518.05, the S&P 500 trading as low as 2822.4, a loss of 3.71 points, also 0.1%. At session lows, the Nasdaq fell as many as 29.25 points, or 0.4% at 7,546.23.
What drove the market?
Wall Street was heartened by a report Thursday afternoon that new tariffs on Mexican imports may not go into effect, and if they do, will be short lived.
Sentiment was also buoyed by rhetoric from central bankers, including the European Central Bank’s, which was interpreted by some as dovish. The ECB left its overnight deposit interest rate at minus 0.4%, while extending its forecast for how long it will keep rates this low into at least the first half of 2020. The ECB had previously indicated rates would remain on hold through the end of 2019.
The central bank run by President Mario Draghi also provided more details on its bank-lending program, known as TLTROs, which aren’t as generous as previous iteration of the program. Draghi also said that the decision to keep rates unchanged until next year doesn’t preclude more stimulus, if the European economy deteriorates significantly.
Read: Draghi says ECB willing to lower rates, make other moves if conditions deteriorate
Meanwhile, there appears no immediate signs of easing of Sino-American trade tensions, as Trump reiterated a threat to place tariffs on a further $300 million in China imports “at least,” according to Reuters. Trump said he’ll make a decision on additional tariffs “probably right after the G-20” meeting scheduled end on June 29.
Read: Is threat of withholding rare-earth metals a key weapon in China’s trade war with U.S.?
Read: U.S. trade war with China may turn rare earth elements into economic pawns
Also see: Powell signals it might be time to wave goodbye to the Fed’s ‘dot plot’
What data were released?
New applications for unemployment benefits rose to 218,000, in the week ended June 1, from 215,000 in the week prior. Economists polled by MarketWatch had expected a 215,000 reading.
The Commerce Department revised its estimate of productivity growth in the first quarter to 3.4% rate, down from the previously estimated 3.6%, and below the 3.5% expected by economists, per a MarketWatch poll.
What stocks were in focus?
Shares of Fiat Chrysler Automobiles NV are in focus after The Wall Street Journal reported that the company withdrew its merger proposal from Renault SA citing a lack of backing from the French government. Fiat shares rose 0.1% Thursday.
Shares of Stitch Fix Inc. surged 14.7%, after the personal styling company reported Wednesday evening that it earned a 7 cents per-share profit in the fiscal third-quarter, when analysts were expecting a 3 cents per-share loss.
Ciena Corp. stock jumped 26.8%, after the network-and-communications infrastructure company reported fiscal second-quarter earnings and revenue that rose well above expectations.
J.M. Smucker Co. also reported better-than-expected earnings Thursday morning, though it fell short of revenue targets for the fiscal fourth quarter. Shares fell 2.3% Thursday.
Shares of Michaels Companies Inc. tumbled 12.4%, after the arts and crafts retailer reported fiscal first-quarter sales that missed expectations and lowered its guidance for the full-year 2019.
Shares of Kirkland’s Inc. fell 50.4%, after the home décor retailer reported a larger fiscal first-quarter than expected, on sales that fell more than forecast.
What did strategists and investors say?
“We’ve rebounded from oversold levels, and now the market is grappling with the two-day rally while focused on ongoing trade talks,” Paul Brigandi, co-head of portfolio management and head of trading at Direxion, told MarketWatch.
“Investors are going to remain cautious until there’s some resolution on trade,” he added. Those fears, however, “are being kind of balanced by a more dovish stance from the ECB today and the Fed earlier this week.”
How did other assets fare?
Japan’s Nikkei 225 finished flat and Hong Kong’s Hang Seng Index gained 0.3%. However, China’s Shanghai Composite Index closed 1.2% lower even as Beijing increased stimulus efforts, while the CSI 300 closed down 0.9%.
Stocks in Europe closed virtually unchanged, as gauged by the Stoxx Europe 600
In commodities markets, U.S. oil futures clawed back some of Wednesday’s losses after sinking in to a bear market, defined as a fall of at least 20% from a recent peak. Meanwhile, gold prices extended its gains to a seventh straight session, while the U.S. dollar edged lower.
The 10-year Treasury note yield advanced slightly to 2.129%.