The major stock indexes rebounded Thursday as a rally in some of Wall Street’s largest technology names carried the Nasdaq Composite to an all-time high at the start of the corporate earnings season.
The tech-heavy Nasdaq rose 1.2 percent as Facebook and Amazon, both rose to all-time highs. Microsoft also hit an intraday record. Netflix did not participate in the broad tech rally, however, falling more than 1 percent.
Equities rebounded from a steep sell-off on Wednesday sparked by a potential escalation in a trade war between the U.S. and China. The U.S. unveiled on Tuesday a list targeting $200 billion worth of Chinese goods for a 10 percent import tariff. Stocks fell sharply on the news, with the Dow snapping a four-day winning streak.
Eric Freedman, chief investment officer at U.S. Bank Wealth Management, said the lack of an immediate response by China is a positive for the market. He also noted that, while these tariffs are aimed at several Chinese imports, “the mixture of goods is different from that of the first round of tariffs. Also, they don’t come into effect until August.”
The Chinese commerce ministry said Thursday that China has not been in touch with the U.S. about restarting trade talks, but noted that China does not want a trade war. A spokesman for the ministry said, however, China does not fear a trade war.
Last week, the U.S. slapped tariffs on $34 billion of Chinese goods. China responded to the tariffs by imposing its own retaliatory levies on imports from the States.
Investors also shifted their focus toward earnings and data, taking a breather from trade war concerns. On the earnings front, Delta Air Lines reported better-than-expected quarterly results. Analysts expect second-quarter earnings to have grown by 20 percent on a year-over-year basis, according a FactSet forecast.
“It will be healthy for the market to take a breather and let the earnings catch up to the price,” said Tim Courtney, chief investment officer at Exencial Wealth Advisors. “The market is being driven by news lately.” He also said he expects this earnings season to be a strong one.
Weekly jobless claims fell to 214,000 last week and the consumer price index rose at its fastest pace in six years.