Technology, financial and material sectors lead rally
US stocks closed sharply higher on Tuesday, 04 June 2019 notching their best one-day percentage gains since January, after remarks by Federal Reserve Chairman Jerome Powell were seen by some investors as opening the door to a possible rate cut. Support was also tied to renewed hopes tensions between the U.S. and its major trading partners would die down.
The Dow Jones Industrial Average rose 512.4 points, or 2.1%, to end at 25,332.18, while the S&P 500 closed 58.82 points higher, or 2.1%, to 2,803.27. The Nasdaq Composite rallied 194.1 points, or 2.7%, to 7,527.12.
The rally was led by technology, material, financials, consumer discretionary and industrial sectors.
The U.S. stock market gained in Tuesday trade, but investors remained skittish with no apparent progress made on the trade policy front and May data on U.S. manufacturing released Monday revealing the slowest pace of expansion in 2 years.
On Tuesday, Federal Reserve Chairman Jerome Powell suggested that interest rates could be cut if trade tensions damage the economic outlook. Powell also said the Fed didn't know how or when these trade issues would be resolved.
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On Tuesday, the ICE U.S. Dollar Index ended nearly flat at 97.160.
Data at Wall Street showed U.S. factory orders fell 0.8% in April. Market had forecast a 0.9% fall. The key takeaway from the report is the understanding that business investment was weak in April, evidenced by the 1.0% m/m decline in nondefense capital goods orders excluding aircraft.
Bullion prices finished with a modest gain on Tuesday, 5 June 2019, Gold prices rose to tally a fifth straight session climb, as a broad rise in benchmark U.S. stock indexes failed to knock prices for the haven metal lower. Gold has climbed this week, largely on the back of more tension between the U.S. and other countries over trade and tariffs along with expectations for lower interest rates as bond yields have fallen sharply.
Gold for August delivery on Comex rose 80 cents, or nearly 0.1%, to settle at $1,328.70 an ounce after spending much of the session struggling for direction. Futures for the yellow metal have now posted gains for five consecutive sessions, the longest since a similar streak ended on Jan. 31.
July silver added 2.9 cents, or 0.2%, to $14.769 an ounce, after rising 1.2% on Monday.
Crude oil futures recovered from early losses on Tuesday, 04 June 2019 to end higher in the wake of a four-session losing streak that had threatened to push U.S. prices into bear-market territory.
West Texas Intermediate crude for July delivery added 23 cents, or 0.4%, to settle at $53.48 a barrel on the New York Mercantile Exchange two pennies short of recouping all that it lost a day earlier. It fell om Monday for a fourth consecutive session to settle at $53.25, the lowest since mid-February.
August Brent rose 69 cents, or 1.1%, to finish at $61.97 a barrel on ICE Futures Europe.
Looking ahead, investors will receive the ADP Employment Change report for May, the ISM Non-Manufacturing Index for May, the Fed's Beige Book for June, and the weekly MBA Mortgage Applications Index for May on Wednesday.
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