U.S. Stocks Climb on Tech Rally Amid Trade Optimism

U.S. stocks ended positively on Thursday, fueled by a surge in technology shares as investors sought further indications of easing global trade tensions. A mixed release of corporate earnings also influenced market sentiment. All three major indices saw gains.

Performance of Major Benchmarks

The Dow Jones Industrial Average (DJI) rose 1.2%, adding 486.83 points to close at 40,093.40 points, marking its first close above 40,000 since April 15.

The S&P 500 increased by 2%, or 108.91 points, finishing at 5,484.77 points and exiting correction territory with its third consecutive gain. The largest gains came from tech, materials, industrial, and consumer discretionary sectors.

The Technology Select Sector SPDR (XLK) advanced 3.7%, while the Consumer Discretionary Select Sector SPDR (XLY) increased by 2%. The Materials Select Sector SPDR (XLB) and Industrials Select Sector SPDR (XLI) both rose by 2.2%. Ten of the eleven sectors of the S&P 500 finished in the green.

The tech-heavy Nasdaq climbed 2.7%, gaining 457.99 points to close at 17,166.04 points.

The CBOE Volatility Index (VIX), often referred to as the fear gauge, dropped 6.96% to settle at 26.47. Advancers outnumbered decliners by a ratio of 5.84-to-1 on the NYSE and 3.38-to-1 on Nasdaq. A total of 14.95 billion shares were traded on Thursday, below the 20-session average of 19.15 billion.

Market Reaction to Easing Trade Tensions

Investor optimism about alleviated trade tensions between the U.S. and China has been a significant driver for stock gains this week. The trend continued for a third session on Thursday. However, China clarified that no trade discussions had occurred and insisted on the removal of “unilateral tariffs” as a prerequisite to negotiations.

This statement followed President Donald Trump’s commitment to adopting a less confrontational approach in trade talks. Additionally, Treasury Secretary Scott Bessent highlighted potential for a “big deal” on trade between the two nations.

Despite ongoing ambiguity in trade discussions, comments from Trump hinting at lower tariffs have encouraged investors. Presently, the U.S. imposes a 145% tariff on all Chinese imports.

In this environment, technology shares rebounded strongly after weeks of underperformance due to tariff-induced uncertainty. Shares of NVIDIA Corporation (NVDA) increased by 3.6%, while Amazon.com, Inc. (AMZN) and Meta Platforms, Inc. (META) saw gains of 5.9% and 2.5%, respectively.

Earnings Season Insights

Attention among investors also shifted to the ongoing earnings season, with several prominent companies releasing quarterly results on Thursday. The Procter & Gamble Company (PG) saw its shares decline by 3.7% after reporting third-quarter fiscal 2025 earnings of $1.54 per share, aligning with the Zacks Consensus Estimate.

Conversely, American Airlines Group Inc. (AAL) shares increased by 3.1% following a first-quarter 2025 loss of $0.59 per share, which was an improvement over the anticipated loss of $0.69.

Economic Indicators

The Labor Department reported jobless claims at 222,000 for the week ending April 19, an increase of 6,000 from the previous week’s revised figure of 216,000. The four-week moving average decreased by 750 to 220,250.

Continuing claims stood at 1,841,000, reflecting a decrease of 37,000 from the previous week’s revised count of 1,878,000, while the four-week moving average decreased by 1,500 to reach 1,864,000.

The National Association of Realtors noted that existing home sales fell by 5.9% in March to a seasonally adjusted annual rate of 4.02 million, representing a 2.4% decline year over year.

In a separate report, the Commerce Department stated that durable goods orders surged by 9.2% in March, significantly surpassing the consensus expectation of a 2% increase.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.