Wall Street advanced on Thursday as investors mulled a mixed batch of corporate earnings and shifting geopolitical concerns.
All three major US stock indexes closed higher, with tech strength nudging the Nasdaq into the lead. But the small-cap Russell 2000 was the clear outperformer. The indexes gained some momentum after the White House confirmed US President Donald Trump will meet Chinese President Xi Jinping next week as part of his trip through Asia.
Trade tensions between Washington and Beijing have been escalating in recent days, marked by tit-for-tat retaliatory measures announced by both sides. Confirmation that the two leaders would meet next week appeared to ease those tensions. Trump announced sanctions against Russian oil companies, marking a sharp policy shift in ramping up the pressure on Moscow over its war against Ukraine, ratcheting up geopolitical strife and sending world oil prices jumping.
"The Trump-Xi confirmation is clearly positive," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.
"That's a good checkpoint for sentiment, which has been really up-and-down on trade and that's obviously playing a role today.
"Additionally, earnings have been really strong in general."
"And that's supporting the market from a fundamental perspective."
The Dow Jones Industrial Average rose 144.20 points, or 0.31 per cent, to 46,734.61, the S&P 500 gained 39.03 points, or 0.58 per cent, to 6,738.43 and the Nasdaq Composite gained 201.40 points, or 0.89 per cent, to 22,941.80.
Third-quarter reporting season hits full stride
Tesla shares rebounded, gaining 2.3 per cent following its third-quarter profit miss. The electric-vehicle maker was the first of the "Magnificent Seven" group of megacap momentum stocks that account for more than a third of the S&P 500's market cap.
IBM dropped 0.9 per cent after reporting a slowdown in its key cloud software segment, eclipsing its earnings beat. So far, just over a quarter of the companies in the S&P 500 have reported third-quarter results. Of those, 86 per cent have beaten consensus expectations, according to LSEG data.
In aggregate, analysts currently expect S&P 500 third-quarter earnings growth of 9.9 per cent year-on-year, up from their 8.8 per cent growth estimate as of October 1, per LSEG.
Quantum computing shares lift
Quantum computing firms jumped after the Wall Street Journal reported that the Trump administration was in talks with several of them to take equity stakes in exchange for federal funding.
IonQ, D-Wave Quantum, Quantum Computing and Rigetti Computing added between 7.1 per cent and 13.8 per cent. Energy companies, buoyed by spiking crude prices in the wake of Trump's sanctions on Russian oil, enjoyed the biggest percentage gain among the 11 main sectors of the S&P 500, rising 1.3 per cent.
