S&P 500, Dow Reach Hit Record Highs as Stimulus-Led Market Rally

The S&P 500 and the Dow Jones Industrial Average ended Tuesday at record highs despite weak consumer confidence data, as mining stocks surged after China announced a sweeping stimulus package. Initial gains were pared after a report from the Conference Board showed an unexpected drop in U.S. consumer confidence in September, fueled by rising concerns about the job market.

“Today’s price action is mostly about China’s overnight policy announcements. Direct support for its stock market and promises of lower interest rates have sent international stocks surging,” noted Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, N.C. “That’s spilling over into parts of the U.S. market, particularly those more sensitive to China, such as metals and mining.”

The Dow Jones index rose 83.57 points, or 0.20%, to 42,208.22, while the S&P 500 index rose 14.36 points, or 0.25%, to 5,732.93 and the Nasdaq Composite index rose 100.25 points, or 0.56%, to 18,074.52. Among the 11 sectors in the S&P 500, materials led the way, gaining 1.35%.

Metals prices surged after China, the world’s second-largest economy, unveiled its biggest stimulus effort since the pandemic to combat deflation. Copper and lithium miners benefited significantly, with Freeport-McMoRan up 7.93%, Southern Copper gaining 7.22%, Albemarle rising 1.97% and Arcadium Lithium rising 3.2%.

US-listed Chinese stocks also posted significant gains, with Alibaba rising 7.88%, PDD Holdings adding 11.79% and Li Auto rising 11.37%, tracking positive trends in domestic markets. Megacap stocks posted mixed results, with Nvidia gaining 3.9% while Microsoft fell 1.15%. The broader technology sector was up 0.79%.

The Philadelphia SE Semiconductor Index rose 1.23%, while Qualcomm and Intel rose 0.54% and 1.11%, respectively. Meanwhile, Federal Reserve Governor Michelle Bowman warned that key inflation measures remained “troublingly above” the Fed’s 2% target, urging caution as the Fed considers interest rate cuts.

This week, the market is focused on weekly jobless claims and consumer spending data. In stock news, Visa fell 5.49% after the U.S. Department of Justice filed a lawsuit against the company for alleged antitrust violations, weighing on the financial sector, which fell 0.92%.

On the NYSE, rising stocks outnumbered falling stocks by a ratio of 1.93 to 1. There were 636 new highs and 43 new lows. The S&P 500 posted 62 new 52-week highs with no new lows, while the Nasdaq Composite posted 103 new highs and 101 new lows.

Trading volume on U.S. exchanges was 11.42 billion shares, compared with the average of 11.60 billion over the last 20 trading days.

(Based on information from the agency.)