Crude Oil Decline Boosts Stocks as US-China Trade Talks Lend Support
The S&P 500 Index and other major stock indexes are rising today, reaching new highs. The S&P 500 is up by +0.93%, with a 1.5-week high, while the Nasdaq 100 is up +1.97% to a 5-week high.
This upward movement is largely due to the decline in crude oil prices, which has eased inflation risks and lowered bond yields. WTI crude oil is down more than -4% at a 1-week low, and the 10-year T-note yield is down -3 bp to 4.96%. Additionally, positive anticipation ahead of this week's summit between Presidents Trump and Xi Jinping is also lifting equity markets.
US Trade Representative Jamieson Greer stated that 'The focus is on stability between the US and China,' with efforts to extend a trade truce. However, hawkish comments from Chicago Fed President Austan Goolsbee warning of potential rate hikes to restore price stability have tempered gains in stocks and bonds.
Chipmakers and AI-infrastructure stocks are leading the charge, with companies like ARM Holdings Plc, Intel, Advanced Micro Devices, and Qualcomm rising by more than 5%. Cryptocurrency-exposed stocks are also surging, including Bitcoin, Coinbase Global, and Galaxy Digital Holdings. Energy stocks, on the other hand, are falling due to the decline in crude oil prices.