As trade tensions between the United States and China intensify, all three major New York stock indexes opened higher. The gains appear to be driven by strong results from large banks and big tech corporations.
At 9:45 a.m. on the 15th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose 315.27 points, or 0.68%, from the previous session to 46,585.73. The Standard & Poor's (S&P) 500 gained 53.12 points, or 0.80%, to 6,697.43, and the Nasdaq composite added 190.32 points, or 0.85%, to 22,712.02.
With the U.S.-China trade war appearing poised to reignite in earnest, U.S. President Donald Trump said the previous afternoon on Truth Social that he is considering halting imports of Chinese cooking oil. It is a response to China's suspension of U.S. soybean imports. Earlier, the United States also hit back at China's rare earth and mineral export controls by saying it would impose an additional 100% tariff.
In this environment, strong earnings from large U.S. banks and big tech seem to have thawed investor sentiment frozen by U.S.-China trade frictions. Morgan Stanley beat market expectations by a wide margin on both earnings per share (EPS) and revenue for the third quarter of this year. Revenue was at a record high. Bank of America also topped expectations on EPS and revenue.
In particular, both companies saw a sharp jump in fees from the investment bank (IB) institutional sector. This is a signal that mergers and acquisitions (M&A) and initial public offerings (IPO) are active.
On top of that, news that not only big tech but also major financial firms have begun joining the artificial intelligence (AI) capital expenditure industry spurred risk appetite. An AI infrastructure investment consortium that includes the world's largest asset manager BlackRock and Nvidia is said to plan to acquire the data center design and operations company "Aligned Data Centers" for $40 billion.
Art Hogan, chief market strategist at B. Riley Wealth Management, said, "Earnings season overall can be much better than expected because the percentage of corporations that are posting higher-than-usual returns and lifting share prices is higher (in the S&P 500)," adding, "However, it will not necessarily have only positive effects until the government reopening draws closer and more clarity is added to trade relations with China."
Bank stocks were broadly higher. JPMorgan Chase is up more than 2%, and Bank of America is up 3.86%. Morgan Stanley is surging 6.6%. Goldman Sachs is up only 0.32%.
Big tech corporations with a market capitalization of $1 trillion or more are also all higher. Broadcom is up more than 2%, and Oracle is up 4%. Buying is concentrated in the AI infrastructure space. The Philadelphia Semiconductor Index is jumping 2.2%. TSMC and ASML are each up around 3%.