By Stephen Culp
NEW YORK (Reuters) -The S&P 500 and the Nasdaq closed higher on Wednesday while gold resumed its ascent as investors weighed upbeat earnings against mounting trade tensions between the United States and China.
All three major U.S. stock indexes ended well below session highs as the day progressed and risk appetite cooled. The blue-chip Dow ended the day with a nominal loss.
Crude prices forfeited earlier gains and safe-haven gold hit new highs as Washington and Beijing ramped up the rhetoric in their ongoing tariff dispute.
U.S. President Donald Trump said he was considering cutting some trade ties with Beijing in response to China not buying U.S. soybeans. This followed China’s ramped-up restrictions on crucial rare earth exports.
U.S. Trade Representative Jamieson Greer blasted China’s move on Wednesday, calling its expansion of rare earth export controls “a global supply-chain power grab,” but along with Treasury Secretary Scott Bessent, stressed that Washington did not want to escalate the conflict.
“There’s fear out there and we really don’t know how tariffs and the slower employment is going to affect consumer spending and company financials going forward,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
“I hope they get together and find a solution that is amenable to both parties, because this escalation isn’t good for markets. It’s probably not good for either economy.”
Earlier in the session, upbeat third-quarter results from Morgan Stanley and Bank of America buoyed investor sentiment.
The Dow Jones Industrial Average fell 17.15 points, or 0.04%, to 46,253.31, the S&P 500 rose 26.75 points, or 0.40%, to 6,671.06 and the Nasdaq Composite rose 148.38 points, or 0.66%, to 22,670.08.
European stocks ended higher as upbeat results from France’s LVMH sparked a rally in luxury goods, soothing worries that slowing global economic growth and ongoing tariff wars are dampening corporate health.
MSCI’s gauge of stocks across the globe rose 7.36 points, or 0.75%, to 985.67.
The pan-European STOXX 600 index rose 0.57%, while Europe’s broad FTSEurofirst 300 index rose 14.31 points, or 0.64%
Emerging market stocks rose 26.33 points, or 1.97%, to 1,365.31. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 1.95%, to 708.31, while Japan’s Nikkei rose 825.35 points, or 1.76%, to 47,672.67.
The dollar slipped against its peers as market sentiment weakened in the face of the continuing U.S.-China trade skirmish.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.36% to 98.71, with the euro up 0.34% at $1.1645.
Against the Japanese yen, the dollar weakened 0.37% to 151.27.
U.S. Treasury yields turned higher as investors digested the latest development in the U.S.-China trade dispute.
The yield on benchmark U.S. 10-year notes rose 1.8 basis points to 4.04%, from 4.022% late on Tuesday.
The 30-year bond yield rose 0.9 basis points to 4.633% from 4.624% late on Tuesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.2 basis points to 3.501%, from 3.479% late on Tuesday.
Oil prices reversed earlier gains, drifting near a five-month low after the International Energy Agency projected a 2025 supply surplus, and amid the escalating trade dispute between the world’s two largest economies.
U.S. crude dipped 0.73% to settle at $58.27 per barrel, while Brent settled at $61.91 per barrel, down 0.77% on the day.
Gold extended its record run, breached the $4,200 per oz level for the first time as the safe haven metal continued to benefit from geopolitical tensions.
Spot gold rose 1.66% to $4,210.13 an ounce. U.S. gold futures rose 1.48% to $4,200.10 an ounce.
(Reporting by Stephen Culp; Additional by Tom Wilson in London and Rae Wee in SingaporeEditing by Rod Nickel and Nick Zieminski)
