Rise on Hopes for US-China Trade Deal... Tesla Rallies for Third Day [New York Stock Market Briefing]

Doohyun Hwang

Summary

Major indices in the New York stock market closed higher on hopes for US-China trade talks.
Especially, semiconductor and AI-related stocks showed strength, and Tesla continued its rally for the third day on optimism about reconciliation between Trump and Musk.
It was noted that if the US-China negotiations stall, market volatility could increase.

*On the 5th (local time) at the New York Stock Exchange, Gary Gensler, SEC Chair, is broadcasting before ringing the 'opening bell' to commemorate a listing./New York=Kim Beom-jun, Reporter*

Major indices on the New York Stock Exchange ended higher after fluctuating throughout the session. Although the US-China trade talks, ongoing for the second day in London, UK, have not yet yielded results, positive remarks from Howard Lutnick, US Secretary of Commerce, boosted the markets.

On the 10th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 42,866.87, up 105.11 points (0.25%) from the previous day. The Standard & Poor's (S&P) 500 Index rose 32.93 points (0.55%) to 6,038.81, and the NASDAQ Composite Index climbed 123.75 points (0.63%) to close at 19,714.99.

Howard Lutnick, a US trade negotiator, said that the US-China trade talks were 'going very well.' It was reported that the US and China, after reaching a broad agreement, were coordinating on technical details.

Market participants expect that rather than a comprehensive deal, the negotiations may produce agreements to ease regulations on certain items. In particular, it was reported that the US had offered to ease semiconductor-related tech sanctions in exchange for a stable supply of rare earths from China.

Accordingly, the Philadelphia Semiconductor Index, composed of AI and semiconductor-related stocks, surged 2.06%.

However, since stock prices previously rebounded sharply as the US and China postponed imposing high tariffs on each other, there are concerns that a stalled negotiation could unsettle the markets going forward.

By sector, all sectors except industrials ended higher. Notably, communication services, consumer discretionary, healthcare, and energy all rose over 1%.

Tesla soared 5.67%. Driven by hopes for a reconciliation between US President Donald Trump and Tesla CEO Elon Musk, the stock rose for a third straight session, recovering much of its recent sharp losses.

Intel jumped 7.95% amid optimism over the outcome of US-China trade negotiations.

TSMC climbed 2.64% after reporting a 39.6% year-on-year increase in May sales.

According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the probability of a rate hold at the July Federal Funds Rate futures market stood at 85.5%.

The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) fell 0.21 points (1.22%) to 16.95.

Han Kyung-woo, Hankyung.com reporter case@hankyung.com