Wall Street scales fresh highs on tech earnings, US-China trade optimism

NEW YORK – Wall Street’s main indexes posted record closing highs for the second day in a row on Oct 27 as investors were hopeful about the

prospects for a US-China trade deal

and looked forward to a week packed with high-profile technology earnings and a widely expected US interest rate cut.

US President Donald Trump and his Chinese counterpart Xi Jinping are due to meet on Oct 30 to decide on a framework that could pause tougher US tariffs and China’s rare-earth export curbs, easing market jitters around a trade war and sending Wall Street’s “fear gauge” VIX down to a roughly one-month low.

During weekend TV appearances, US Treasury Secretary Scott Bessent talked about agreements around China buying US soya beans and its rare-earth exports after two days of trade talks in Malaysia.

Along with the upcoming meeting, Mr Bessent’s comments boosted hopes for easing US-China tensions, said Mr Scott Wren, senior global market strategist at Wells Fargo Investment Institute in St Louis, Missouri.

Earnings from five of the “Magnificent Seven” megacap companies – Microsoft, Apple, Alphabet, Amazon and Meta – later this week will test the market rally’s endurance, which has largely depended on optimism around growth and capital expenditures related to artificial intelligence (AI).

“With five of the Mag Seven reporting this week, what the market expects to hear is confirmation that all this AI CapEx is coming through, that the revenues and profits from AI are coming through,” said Mr Wren.

The Dow Jones Industrial Average rose 337.47 points, or 0.71 per cent, to 47,544.59. The S&P 500 advanced 83.47 points, or 1.23 per cent, to 6,875.16 for its first close above the 6,800 level. The Nasdaq Composite gained 432.59 points, or 1.86 per cent, at 23,637.46.

Among the S&P 500‘s 11 major sectors, three rallied sharply. Communication services added 2.3 per cent with Alphabet’s 3.6 per cent rally leading the way.

Technology ended up 2 per cent at a fresh record close, along with the Philadelphia Semiconductor index, which added 2.7 per cent. The biggest advance in tech came from Qualcomm, which surged 11 per cent after it unveiled two AI chips for data centres, with commercial availability starting in 2026.

AI chip leader Nvidia also rose 2.8 per cent and provided the S&P 500‘s biggest boost.

Consumer discretionary finished up 1.5 per cent, led by Tesla, which rallied 4.3 per cent on optimism around the US-China talks.

But Mr Christopher Brown, Synovus’ vice-president of investments in private wealth management, said Tesla’s rally may be short-lived since the stock is still expensive “even with the best negotiated US-China trade deal”.

The lagging sectors were consumer staples, off 0.27 per cent and materials, which finished down 0.25 per cent.

Shares of US-listed rare earth miners slumped as the prospects for a US-China agreement eased fears of supply disruptions that had boosted the sector in 2025. Shares of Critical Metals ended down 13.7 per cent, while NioCorp Developments dropped 11.5 per cent and Ramaco Resources fell 2.6 per cent.

US-listed shares of Chinese companies including Alibaba Group Holding, JD.com, PDD Holdings rallied between 2.7 per cent and 3 per cent while Baidu climbed 4.8 per cent.

Fed rate cut fully priced in

Cooler inflation data last week all but sealed bets for a 25-basis-point rate cut by the Federal Reserve on Oct 29, and investors will closely monitor chair Jerome Powell’s comments for clues on a December cut, as the US government shutdown holds up key data releases.

Advancing issues outnumbered decliners by a 1.74-to-1 ratio on the NYSE, where there were 659 new highs and 69 new lows.

On the Nasdaq, 2,593 stocks rose and 2,145 fell as advancing issues outnumbered decliners by a 1.21-to-1 ratio. The S&P 500 posted 37 new 52-week highs and three new lows, while the Nasdaq Composite recorded 132 new highs and 57 new lows.

On US exchanges, 19.76 billion shares changed hands, compared with the 20.85 billion moving average for the last 20 sessions. REUTERS