The Three Major Indices Rise on Hopes for Trump-Xi Jinping Call… Steelmakers and Semiconductor Stocks Strong [New York Stock Market Briefing]

Semiconductor Stocks Strong… NVIDIA Rises by Over 1%

The three major U.S. stock indices managed to rebound on the 2nd (local time), reversing earlier intraday declines. While tensions heightened over the implementation of the 'Geneva Trade Agreement' between the U.S. and China, investor sentiment was supported by expectations that U.S. President Donald Trump and Chinese President Xi Jinping may hold a call this week.

On this day, the Dow Jones Industrial Average closed at 42,305.48, up 35.41 points (0.08%) from the previous session at the New York Stock Exchange (NYSE). The S&P 500 (Standard & Poor's) index rose 24.25 points (0.41%) to close at 5,935.94. The NASDAQ Composite Index finished at 19,242.61, up 128.85 points (0.67%).

The major stock indices started the day lower following a statement from China’s Ministry of Commerce rebutting President Trump’s complaints last week that China was not properly implementing the Geneva Agreement. However, as rumors emerged in late trading about a possible call between President Trump and President Xi Jinping, the indices reversed and closed higher on these expectations. Caroline Leavitt, White House spokesperson, said: "We can say with certainty that there is a high possibility the two leaders will have a call this week."

According to foreign press, President Trump is expected to include each country's 'best offer' by the 4th in the draft letter from the Office of the United States Trade Representative (USTR) to speed up tariff talks with major nations. However, the market interpreted this as a sign that the Trump administration does not intend to prolong tariff uncertainty.

By sector, all sectors except industrials closed higher. The energy sector rose by more than 1%.

As the Trump administration abruptly raised tariffs on imported steel from 25% to 50%, steelmakers and construction stocks diverged in performance. Shares of U.S. steelmaker Cleveland-Cliffs, expected to benefit from the increased steel tariffs, jumped by more than 23%, while Steel Dynamics also surged by over 10%.

In contrast, U.S. homebuilders PulteGroup and the nation’s largest homebuilder D.R. Horton were little changed.

Among the 'Magnificent Seven' giant tech firms, Tesla and Alphabet fell by more than 1%, while the other five rose. Apple finished slightly higher, lifting its market capitalization back above the $3 trillion mark.

NVIDIA rose by over 1% on news of surging AI-dedicated chip demand, and major semiconductor stocks were also strong.

U.S. manufacturing activity contracted again in May, attributed to the combined effects of tariffs and supply chain disruptions. The Institute for Supply Management (ISM) announced that the May Manufacturing Purchasing Managers' Index (PMI) recorded 48.5, a slight decrease from April's 48.7.

The May U.S. Manufacturing PMI by S&P Global was 52, continuing expansion, but fell short of the market forecast of 52.3.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell by 0.21 point (1.13%) to 18.36.

Oh Jung-min, Hankyung.com reporter blooming@hankyung.com