The Wall Street rally continued into a second day on Tuesday, lifting investor sentiment following some positive developments in US-China trade talks, favorable inflation data, and a significant investment commitment from the Middle East.
Consumer Price Index data showed signs of cooling in April, easing fears that Trump’s proposed trade tariffs could lead to a spike in inflation. Both the headline and core figures declined or met expectations.
S&P 500 climbed 0.7%, building on Monday’s impressive 3.3% surge, reaching its highest point since early March.
Nasdaq 100 saw a remarkable 1.8% increase, driven by a strong 5.3% gain in Nvidia Corp.
The chipmaker announced that the UAE has been authorized to buy over a million advanced AI processors, while Saudi Arabia has pledged to invest up to $600 billion in US initiatives, particularly in technology and infrastructure.
Alphabet Inc.’s Google, along with Oracle Corp., Salesforce Inc., Uber Technologies Inc., and datavolt, are set to invest a combined total of $80 billion in tech projects in the US and Saudi Arabia, according to a White House statement.
This news coincided with President Donald Trump‘s diplomatic visit to the Middle East, where he reiterated his belief in the Republican tax bill, labeling it “the biggest tax cut in history,” and expressed optimism about its passage.
Crude oil prices surged nearly 3% to cross the $63 per barrel mark, following Trump’s warning that threats to regional stability could reduce Iranian oil exports to zero.
The rally in oil has seen a 10% increase over the last four sessions, marking its best four-day performance since 2022.
The energy sector also benefitted, with US energy stocks rising by 1.5% that day.
US Treasury Department yields surged to 4.50% for ten-year bonds, while thirty-year bonds rose to 4.95%, reflecting stronger expectations for economic resilience amidst improved risk appetite.
US Dollar Index dipped 0.5% after strong gains on Monday, indicating a slight pullback as traders adjusted their positions. In contrast, gold rose 0.6%, recovering ground amid geopolitical tensions.
Bitcoin increased by 1.4%, reaching $104,000, as it regained momentum following several days of stagnation.
- SPDR S&P 500 ETF Trust grew by 0.84% to $587.87.
- SPDR Dow Jones Industrial Average dropped 0.4% to $422.27.
- Investco QQQ Trust Series saw a jump of 1.74% to $516.67.
- Ishares Russell 2000 ETF rose by 0.45% to $208.81.
- The technology Select Sector SPDR Fund outperformed, up 2.2%, while the Healthcare Select Sector SPDR Fund fell 2.4%.
- Clean energy stocks rallied after House Republicans introduced better tax incentives for renewable energy. The Investco Solar ETF rose by 5.9%, with First Solar Inc. advancing by 21% after reporting major profits.
- Semiconductor stocks also performed well, with the iShares Semiconductor ETF rising over 10% in the last two sessions.
- UnitedHealth Group Inc. plummeted 16% on Tuesday, citing soaring medical costs and retracting its full-year guidance. The company’s CEO, Andrew Whitty, announced his resignation for “personal reasons.”
