United States stock markets climbed on Tuesday (Wednesday AEST), lifted by a rally in technology stocks led by Nvidia, even as trade tensions and a subdued economic outlook weighed on sentiment.
The Dow Jones Industrial Average advanced 214.2 points or 0.5% to finish at 42,519.6, the S&P 500 gained 34.4 points or 0.6% to close at fresh three-month highs of 5,970.4, and the Nasdaq Composite climbed 156.3 points or 0.8% to end the session at 19,399.0.
Nvidia drove the gains, up 2.8% and surpassing Microsoft in market capitalisation for the first time since January. The graphics-chip and artificial intelligence (AI) leader extended Monday’s momentum, helping lift the broader semiconductor sector.
Other chipmakers rallied, with Broadcom gaining 3.3% to a fresh record close, while Micron Technology jumped 4.2%.
Energy companies also supported the market amid higher crude oil prices. Occidental Petroleum popped 3%, Diamondback Energy surged 3.4%, and Chevron lifted 1.2%.
The upbeat equity session unfolded despite a more cautious global economic outlook. The Organisation for Economic Co-operation and Development (OECD) downgraded its forecast for U.S. growth in 2025 to 1.6%, from a previous 2.2%.
The Paris-based institution noted: "The U.S. tariffs, together with retaliatory action by China, as well as more limited action by Canada, means that trade equivalent to over 2% of world GDP is now directly facing higher tariffs, pointing to much greater disruption than during the U.S.-China trade tensions in 2018-19."
The report follows renewed trade frictions after Beijing accused the United States of breaching a trade truce, a rebuttal to President Donald Trump’s claims that China had failed to uphold its end of a temporary deal.
White House press secretary Karoline Leavitt said Monday that President Trump and President Xi are expected to speak later this week.
Meanwhile, the European Union criticised Trump’s move to double tariffs on imported steel to 50%, warning the move could jeopardise ongoing negotiations.
On the bond markets, yields ticked higher. The 10-year Treasury yield rose 0.3% to 4.458%, while the 2-year yield climbed 0.5% to 3.957%.
