Stocks finished higher Wednesday, reversing early session declines amid easing trade tensions. The Dow rose 115 points, while the S&P 500 added 0.6%. The Nasdaq Composite advanced 1.1%.
Investor sentiment was boosted after the Trump administration announced the proposed tariffs on European auto imports will be delayed by up to six months. Also providing a tailwind to markets were comments from Treasury Secretary Steven Mnuchin that U.S. officials will likely travel to Beijing soon to continue trade negotiations. On the data front, U.S. retail sales dipped 0.2% in April, missing expectations of a slight increase due to weak automobile sales. A separate report showed U.S. industrial production slipped 0.5% in April. The soft economic updates inspired a rally in Treasuries and inverted the yield curve between the 3-month bill and 10-year note. The yield on the benchmark note fell four basis points to 2.37% while the yield on the 3-month bill was unchanged at 2.41%.
The Communication Services sector paced the gains with Google parent Alphabet adding 4.1% to $1,170.80. Technology stocks also outperformed with semiconductor equipment maker Applied Materials advancing 3.7% to $41.50 after being the subject of an analyst upgrade. Meanwhile, Financials lagged as treasury yields continued to fall. In earnings, Macy’s slipped 0.5% to $21.70 despite reporting quarterly profit and same-store sales that exceeded analyst estimates.
Breadth was positive on issues by 5:3 on the NYSE and 6:5 on the Nasdaq. Composite NYSE volume was more than 3.1 billion shares. In commodities, WTI crude added 0.7% to $62.18/barrel.