STORY: Wall Street ended higher on Thursday, with the S&P 500 index hitting a closing high as semiconductor stocks rose and investors cheered some encouraging economic data.
The Dow rose six-tenths of a percent, the S&P 500 rose four-tenths, and the Nasdaq rose another six-tenths of a percent.
Weekly jobless claims fell more than expected, suggesting stability in the labor market, while final gross domestic product (GDP) figures confirmed second-quarter economic growth of 3% .
This allayed investor concerns that the Federal Reserve’s massive interest rate cut earlier this month was caused by the economic collapse.
Meanwhile, just days after announcing a stimulus package, Chinese leaders promised to deploy “necessary fiscal spending” to stimulate the world’s second-largest economy.
That pushed up metal prices further, and so did the stocks of copper miners like Freeport-McMoRan and lithium miners Albemarle and Arcadium.
Rob Sluimer, technical strategist at RBC Wealth Management, explains why China’s recovery is good for commodities.
“Although China has a fairly negative economic background, we have already begun to see signs of bottoming out in indexes such as the Hong Kong Stock Exchange and China Stock Exchange over the past month or so. The fresh stimulus has caused many of these markets to rise significantly (Flash), and a very similar pattern is occurring in many of the industry groups and commodities that are sensitive to the global economy. A good example of this is when China’s economy starts to improve, industrial metals like copper are used in large quantities.
US-listed stocks of Chinese companies such as Li Auto, Temu’s parent company PDD Holdings, and Alibaba all posted solid gains.
Wells Fargo shares rose more than 5% after reports that major banks have sent the Federal Reserve to consider lifting asset limits.
Additionally, Southwest Airlines’ stock price rose nearly 5.5% after it raised its third-quarter earnings forecast.
