U.S. stocks surged Tuesday as investors bet on easing trade tensions between the Chinese mainland and the United States, with major indices climbing to multi-week highs. The Dow Jones Industrial Average rose 0.25%, while the S&P 500 and Nasdaq Composite gained 0.55% and 0.63%, respectively, fueled by optimism over ongoing diplomatic negotiations.
Energy and consumer discretionary sectors led gains, rising 1.77% and 1.19%, as markets extended their June rally. Tesla shares jumped 5.67%, recovering from recent volatility tied to CEO Elon Musk's public disputes. Tech giants Alphabet, Meta, and Apple also advanced, shrugging off earlier concerns about innovation slowdowns.
Freedom Capital Markets strategist Jay Woods noted: "Shares have eclipsed key technical levels, signaling renewed confidence in global economic stability." However, the World Bank tempered enthusiasm with a revised U.S. growth forecast of 1.4% for 2025, down sharply from 2024's 2.8% rate, citing trade uncertainty as a persistent risk.
While HSBC analysts predict short-term equity gains, they warn of medium-term challenges as markets approach historic valuations. The mixed outlook reflects both optimism about near-term trade resolutions and lingering questions about long-term economic fundamentals.
