U.S. stocks closed higher on Tuesday, driven by a chipmaker rally, as investors awaited more clarity on potential trade deals between the United States and its trading partners. All three major indexes ended in positive territory.
The Dow Jones Industrial Average (DJI) rose 0.5% or 214.16 points, to end at 42,519.64 points.
The S&P 500 gained 0.6% or 34.43 points to close at 5,970.37 points. Materials and tech stocks were the biggest gainers.
The Materials Select Sector SPDR (XLB) gained 1%, while the Technology Select Sector SPDR (XLK) rose 1.5%. The Industrials Select Sector SPDR (XLI) added 0.8%. Eight of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq jumped 0.8%, or 156.34 points, to finish at 19,398.96 points.
The fear-gauge CBOE Volatility Index (VIX) was down 3.65% to 17.69. Advancers outnumbered decliners on the NYSE by a 2.32-to-1 ratio. On Nasdaq, a 2.07-to-1 ratio favored advancing issues. A total of 15.69 billion shares were traded on Tuesday, lower than the last 20-session average of 17.8 billion.
Chip stocks rallied on Tuesday, led by NVIDIA Corporation (NVDA). Shares of the artificial intelligence darling ended 2.8% higher on Tuesday, surpassing Microsoft Corporation (MSFT) in market capitalization for the first time this year.
Shares of other chipmakers like Micron Technology, Inc. (MU) and Broadcom Inc. (AVGO) also jumped 4.2% and 3.3%, respectively. NVIDIA has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Investors are also optimistic about the United States reaching more trade deals with partner nations. The White House said on Monday that President Donald Trump and Chinese President Xi Jinping will meet this week after Trump accused Beijing of violating a temporary trade agreement.
The Trump administration also wants other countries to come up with their best offers by Wednesday so that trade negotiations and accelerate before the temporary 90-day pause comes to an end.
Meanwhile, the Organization for Economic Co-operation and Development cut its U.S. growth outlook to 1.6% this year from the earlier forecast of 2.2%. Tariff uncertainty was the key reason cited by the OECD to cut the forecast.
In the first major jobs report set released this week, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS report, showed job openings increased in April. The report showed that 1.03 job openings for every unemployed person. Job openings rose 191,000 to 7.391 million in April, slightly up from March.
