United States markets closed higher on Thursday (Friday AEDT), with major indices rebounding as investors bought back into equities following a string of strong earnings results and renewed optimism over U.S.-China relations.
The Dow Jones Industrial Average gained 144.2 points or 0.3% to end at 46,734.6, the S&P 500 rose 39.0 points or 0.6% to finish at 6,738.4, and the tech-heavy Nasdaq Composite outperformed, advancing 201.4 points or 0.9% to 22,941.8.
Equities extended their gains after White House press secretary Karoline Leavitt announced that President Donald Trump will meet Chinese President Xi Jinping next Thursday in South Korea.
The news eased investor concerns over escalating tensions between Washington and Beijing that had weighed on markets earlier in the week.
Relations between the world’s two largest economies have deteriorated in recent days, following retaliatory trade measures from both sides. Confirmation of the upcoming meeting appeared to ease fears of further escalation.
Trump also announced fresh sanctions on Russian oil companies, marking a sharp shift in policy as Washington sought to increase pressure on Moscow over its war in Ukraine. The move heightened geopolitical risks but sent oil prices higher, lifting energy shares.
Thursday’s advance saw the S&P 500 recoup all of its losses from the prior session, when the index fell 0.5% amid a broad risk-off move. The Dow had dropped 0.7%, while the Nasdaq slid 0.9%.
Earnings remained a key driver for the market. Honeywell gained 6.8% after reporting stronger-than-expected quarterly results and raising its full-year outlook.
American Airlines climbed 6% after posting a smaller-than-expected third-quarter loss and issuing upbeat guidance.
Tesla shares rose 2.3%, recovering from the previous session’s decline after its quarterly profit fell short of expectations.
IBM slipped 0.9% after revealing a slowdown in its core cloud software business, overshadowing an earnings beat.
Elsewhere, quantum computing firms rallied following a Wall Street Journal report that the Trump administration was in discussions to acquire equity stakes in several companies in exchange for federal funding.
CNBC later clarified that the administration was not “currently” engaged in such talks.
Oil prices rose after the U.S. imposed sanctions on Russia’s two largest crude exporters, citing the country’s “lack of serious commitment to a peace process to end the war in Ukraine”.
Looking ahead, investors are awaiting Friday’s inflation data, which is expected to provide fresh insight into the strength of the U.S. economy ahead of the Federal Reserve’s late October policy meeting.
According to the CME Group FedWatch Tool, markets are pricing in a 98.9% probability that the central bank will cut interest rates by another 25 basis points in October, and a 91.8% change of another 25bps cut in December.
On the bond markets, yields moved higher, with the 10-year Treasury yield up 1.3% to 4.005% and the 2-year yield rising 1.4% to 3.495%.
