Global financial markets reacted positively on Tuesday as a widely tracked stock index reached a record high and copper prices climbed to their highest level in ten weeks, following China’s announcement of new stimulus measures to bolster its economy.
In the United States, both the Dow Jones Industrial Average and the S&P 500 achieved record closing highs, fueled by a surge in mining stocks. Additionally, the Chinese yuan soared to a 16-month high against the U.S. dollar, while oil prices rose to a three-week high, underscoring the impact of China’s status as the world’s largest crude importer.
Pan Gongsheng, Governor of the People’s Bank of China, outlined plans to reduce borrowing costs and inject liquidity into the economy, which includes a planned 50 basis point cut to banks’ reserve requirement ratios. These measures are also aimed at easing the mortgage repayment burden on households.
On Wall Street, shares of copper and lithium miners experienced significant gains. Notable performers included Freeport-McMoRan, which surged 7.9%, Southern Copper, up 7.2%, Albemarle, increasing by 1.97%, and Arcadium Lithium, which rose 3.2%.
Chinese firms listed in the U.S. also saw substantial gains; Alibaba rose by 7.9%, PDD Holdings climbed 11.8%, and Li Auto advanced 11.4%.
Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina, noted that the developments in China are positively influencing sectors of the U.S. market, particularly industries sensitive to economic cycles, such as metals and mining.
In terms of index performance, the Dow Jones Industrial Average increased by 83.57 points, or 0.20%, closing at 42,208.22. The S&P 500 rose by 14.36 points, or 0.25%, to settle at 5,732.93, while the Nasdaq Composite saw a gain of 100.25 points, or 0.56%, finishing at 18,074.52.
The S&P 500 briefly dipped in early trading after data revealed an unexpected decline in U.S. consumer confidence for September, raising concerns about the health of the labor market.
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