The major domestic equity indexes closed out the day on Wednesday well into positive territory, recovering from early declines, but all the while investors remained leery over the potential for another flare-up in the U.S.-China trade war.
The financial sector index was up 0.91%, recouping the prior day’s losses that came on a deepening of the U.S. Treasury yield curve inversion, which often precedes a recession.
Gains by the S&P 500 index were also supported by a 1.40% increase in the energy index after industry data indicated a stockpile decline of domestic crude, sending crude prices higher, which were up more than 1.5%.
Investors took some relief in the lack of new developments on the trade front, although the Trade Representative’s office on Wednesday reaffirmed President Donald Trump’s plans to impose an additional 5% tariff on a list of $300 billion of Chinese imports starting on Sept. 1 and Dec. 15.
Next week, investors will look toward the monthly jobs report and manufacturing data which could guide expectations on the likelihood of another rate cut from the Federal Reserve at its mid-September meeting.
In another factor that could support stock prices, the 30-year U.S. Treasury yield fell below that of the S&P 500 dividend yield, making equities a more attractive income alternative.
Shares of Autodesk fell 6.74%, as the worst performer on the S&P 500, after the company reduced its full-year earnings forecast.
Shares of Tiffany rose 3.02% after the luxury jeweler reported quarterly earnings above analysts’ estimates.
Approximately 5.81 billion shares changed hands on the major domestic equity exchanges, as compared to the 7.42 billion share daily average over the past 20 trading days.