Chinese Tariff Relief Possible

Well, it might not have been a 1,000-point gain, but it wasn’t nothing. After surging well into the 40,300s in morning trading, the Dow Jones Industrial Average ended Wednesday up 420 (settle down, Elon Musk) points, closing at 39,606 and change. That worked out to more than a 1% gain for the Dow, and the S&P 500 and Nasdaq stock indices did even better, closing up 1.7% and 2.5%, respectively.

All three indices thus ended lower than their highs of the day, but importantly, all three indices still did end the day higher. This, despite rumblings from Wall Street that any lowering of Chinese tariffs will be only “short-term” (said Piper Sandler), that data on the health of the U.S. economy “continue to deteriorate” (said BCA Research), and that even gold prices appear to have hit a ceiling (said BTIG).

Tune back in tomorrow as investors digest all this negative commentary, and decide whether they want to keep this rally rolling, or ride the rollercaster right back down again.

Major stock market indices are well off their highs in early afternoon trading, but all three of the usual suspects continue to glow a healthy shade of green. The Dow Jones Industrial Average is up 1.7%, the S&P 500 2.3%, and the Nasdaq continues to outrun the pack with a 3.3% gain. Helping to keep the rally going in there is Treasury Secretary Scott Bessent, who just commented that he sees “an opportunity for a big deal here” on U.S. and Chinese tariff rates, lowering the heat on the trade war.

In trading news, Chipotle (NYSE: CMG) is due to report earnings after the bell, and investors are modestly optimistic. Purchases of calls outnumber purchases of puts among options traders, 10 to 9, with trading volumes about 50% greater than usual. Traders forecast the stock price could move as much as 7% either way once earnings come out, depending on how good (or bad) the news is.