For the third consecutive day, stock markets experienced an upswing, as companies reported robust earnings amid increasing investor optimism regarding a potential easing of the U.S.-China trade tensions.
On Thursday, stock markets closed higher, supported by the prospect of a reduction in the U.S.-China trade wars after Trump administration officials earlier in the week indicated signs of progress. The S&P 500 rose by 2%, the Dow increased by 1.2%, or 486 points, and the tech-focused Nasdaq concluded with a 2.7% gain.
This market rally commenced earlier in the week following President Donald Trump’s shift in tone towards Federal Reserve Chair Jerome Powell, with whom he had previously disagreed over the central banker’s critical views on tariffs. Treasury Secretary Scott Bessent reportedly advocated for a “de-escalation” with China and painted a positive outlook on potential trade agreements. According to Bessent’s public address at the Institute for International Finance, more than 100 countries are engaging in negotiations.
In parallel, numerous companies are reporting stronger-than-anticipated earnings, even as they caution against economic challenges ahead. On Thursday, American Airlines and Southwest reported substantial profits, which led to an increase in their stock prices despite American Airlines retracting its guidance for the remainder of the year due to uncertain economic conditions. Toy company Hasbro saw its stock rise by 15% following significant growth in its Wizards of the Coast segment.
Furthermore, treasury yields declined, with the yield on the 10-year Treasury decreasing to 4.30% from 4.40%.
This report was initially featured on Fortune.com.
