US close: S&P 500 records yet another all-time high as chipmakers and tech stocks rally
US stocks closed higher on Tuesday, with the S&P 500 setting yet another record close despite threats of new tariffs on European goods dampening much of the optimism seen following news of a possible trade deal between the world's two largest economies.
At the close, the Dow Jones Industrial Average was up 0.26% at 26,786.68, while the S&P 500 had gained 0.29% at 2,973.02 and the Nasdaq Composite closed 0.22% firmer at 8,109.09.
The Dow closed 68.25 points higher on Tuesday after Wall Street stocks finished in the green on the first day of July as participants digested news out of China, Japan and North Korea over the weekend.
Donald Trump stated on Monday evening that any trade deal with Beijing would have to be "somewhat tilted" in favour of Washington.
While sentiment was helped somewhat by the news at the weekend that Trump and his Chinese counterpart Xi Jinping had agreed to a ceasefire in the trade war, market participants turned a touch more cautious ahead of the bell on Tuesday as they waited on actual signs of progress in settling the dispute that had battered global trade, business sentiment and economic growth.
Also on Tuesday, the White House threatened to slap tariffs on an additional $4bn-worth of exports from the European Union as part of a long-running dispute over aircraft subsidies given to US aerospace giant Boeing and its European rival, Airbus.
The US Trade Representative's office presented a list of potential targets — including olives, Italian cheese and Scotch whiskey.
On the data front, there were no big data points on Tuesday but a top US central bank official said that interest rates might need to be cut, but set a high bar for any reduction.
Speaking in London, Federal Reserve Bank of Cleveland chief, Loretta Mester, said she now saw "some chance" that the economy might stumble, which in her opinion should trigger lower short-term official interest rates.
"If I see a few weak job reports, further declines in manufacturing activity, indicators pointing to weaker business investment and consumption, and declines in readings of longer-term inflation expectations, I would view this as evidence that the base case is shifting to the weak-growth scenario [and in turn requiring a cut]," the policymaker said.
But it was too soon to be sure, she added, pointing out how the US economy had overcome many other shocks over the preceding decade.
In corporate news, Delta Airlines shares flew 1.35% higher after revealing its load factor had risen 90.4% throughout June, while Dish Network shares picked up 0.80% after striking a divestiture deal with T-Mobile.
Fiat Chrysler shares accelerated 0.58% after posting its best June retail sales in 14 years, while Nvidia closed 2.37% after revealing it will release three new Turing-based cards later this month.
Chipmakers and tech stocks helped carry the S&P 500 to its new all-time high.
Elsewhere, oil prices turned in a mixed performance after OPEC extended production cuts until March 2020 following a meeting in Vienna a day earlier.
Russian Energy Minister Alexander Novak revealed on Tuesday that non-OPEC producers had agreed to a nine-month rollover of supply cuts, ratifying a policy designed to prop up oil prices amid a weakening global economy.
West Texas Intermediate was up 0.53% at $56.55 a barrel, while Brent Crude was changing hands at $62.40 per barrel - a 4.09% drop.
The benchmark 10-year yield traded around 1.97% while the 2-year rate fell to 1.76%.