Stocks finished higher Wednesday as investors assessed easing political tensions around the world and central bank updates. The Dow climbed 237 points, while the S&P 500 gained 1.1%. The Nasdaq Composite jumped 1.3%.
Investor sentiment was boosted after Hong Kong’s controversial extradition bill was withdrawn. Over in Europe, a British parliamentary vote increased the chances of another Brexit delay, while two opposing political groups in Italy agreed to form a coalition government. The updates outweighed Tuesday’s release from the Institute for Supply Management, which showed the U.S. manufacturing sector contracted for the first time in three years.
On the data front Wednesday, an update showed the U.S. trade deficit narrowed in July, but the gap with China expanded to the widest in six months. In central bank news, New York Fed President John Williams reiterated that the Federal Reserve will “act as appropriate” to help the economic expansion. The release of the Fed’s Beige Book showed that the U.S. economy expanded at a modest pace despite trade uncertainties. Treasuries advanced, with the yield on the 10-year note dipping one basis point to 1.46%.
All 11 S&P 500 sectors finished in positive territory with Technology shares pacing the gains amid a rally in chipmakers. Energy stocks also outperformed as WTI crude spiked 4.5% to $56.38/barrel after a private report showed China’s services sector expanded at the fastest rate in three months. In earnings, Navistar International climbed 13.4% after the truck maker topped analyst profit and sales estimates. Tyson Foods slumped 7.8% following a reduction in its full-year earnings guidance.