U.S. Stocks Climb on Hope Of U.S.-Mexico Trade Deal

U.S. stocks finished higher Thursday as optimism that the U.S. and Mexico can work out a deal before costly tariffs kick in next week helped power the market to its third straight gain.

A modest rally gained strength in the final hour of trading after Bloomberg reported that the U.S. was considering delaying a 5% tariff on Mexican goods that is set to go into effect on Monday.

Investors have been anxious about escalating trade disputes between the U.S. and key trading partners, primarily China. Worries that the trade conflicts will drag on, stifling economic growth and hurting corporate profits, drove a monthlong sell-off in May. That derailed a market run that culminated with the benchmark S&P 500 setting an all-time high on April 30.

Stocks gave up more ground on Monday, but the market has bounced back and is on track to end the first week of June with solid gains.

The S&P 500 index gained 17.34 points, or 0.6%, to 2,843.49. The Dow Jones Industrial Average rose 181.09 points, or 0.7%, to 25,720.66. It briefly climbed 260 points.

The Nasdaq composite reversed an early slide, adding 40.08 points, or 0.5%, to 7,615.55. The Russell 2000 index of smaller companies dropped 3.25 points, or 0.2%, to 1,503.54.

Stock indexes in Europe finished mixed.

Bond prices fell, pushing up the yield on the 10-year Treasury note to 2.13% from 2.12% late Wednesday.

The government’s May jobs report, due out Friday, could prove a key factor in what the Fed does next. A separate gauge of employment growth by ADP earlier this week showed a sharp slowdown in hiring last month. And economists surveyed by FactSet are projecting that the government will also report that hiring slowed last month.

Technology, consumer staples and financial stocks were among the big gainers Thursday. Chipmaker Advanced Micro Devices jumped 7.9%, Campbell Soup added 2.6% and American Express gained 1.1%.

Energy stocks recouped some ground following a broad sell-off a day earlier as crude oil prices rose. Occidental Petroleum rose 3.4% and Chevron added 2.6%.

A smattering of company earnings results brought on either severe punishment or lavish rewards from investors.

Arts and crafts retailer Michaels plunged 12.4% after sales at established stores fell more sharply than Wall Street had forecast. The company also trimmed its full year profit forecast.

Ciena shares jumped 26.8% after the developer of high-speed networking technology beat Wall Street’s fiscal second quarter financial forecasts.

Oil prices rebounded after a steep sell-off a day earlier.

Benchmark U.S. crude gained 1.8% to settle at $52.90 a barrel. Brent crude oil, the international standard, closed 1.7% higher at $61.67 a barrel.

U.S. crude has fallen in five of the past six weeks amid signs that China’s economic growth is slowing. Despite Thursday’s increase, it remains 20.7% below its 2019 closing high of $66.30 in April. The slide puts U.S. crude in what Wall Street calls a bear market.

In other energy futures trading, wholesale gasoline rose 0.9% to $1.71 per gallon. Heating oil added 0.5% to $1.79 per gallon. Natural gas slid 2.3% to $2.32 per 1,000 cubic feet.

Gold rose 0.7% higher to $1,342.70 per ounce, silver added 0.8% to $14.91 per ounce and copper gained 1% to $2.65 per pound.

The dollar rose to 108.44 Japanese yen from 108.42 yen on Wednesday. The euro strengthened to $1.1273 from $1.1228.