U.S. stocks rebounded after a sharp decline, and technology stocks rebounded, leading the Nasdaq index to rise by more than 1% and the Dow Jones index to rise by more than 300 points. The three major indexes retreated in late trading. The Supreme Court held a hearing on whether U.S. President Trump’s “reciprocal tariffs” are legal. Several judges questioned the White House’s rationale, and technology stocks rebounded. Signs of improvement in the U.S. economy and hiring conditions have also helped market sentiment. The U.S. dollar eased off its highs. Oil prices fell below $60 again, and Bitcoin quickly rebounded.
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Market conditions on November 5 (Wednesday)
l The Dow Jones index rose 225.86 points, or 0.48%, to 47,311.10 points.
l The S&P 500 index rose 24.74 points, or 0.37%, to 6,796.29 points.
l The Nasdaq index rose 151.16 points, or 0.65%, to 23,499.80 points.
l New York oil futures for December delivery closed at US$59.60 a barrel, down US$0.96 or 1.6%.
l New York December gold futures closed at 3,992.5 yuan an ounce, up $32.4, or 0.8%.
l Bitcoin was trading at $103,634.96 as of 5 p.m. Eastern Time, up $2,554.67 or 2.49%.
l The U.S. 10-year Treasury bond yield closed at 4.157%, up 6.8 points.
The lawsuit challenging Trump’s “reciprocal tariffs” was heard in the Supreme Court on the first day. Both liberal and conservative justices questioned whether the Trump administration had sufficient grounds to invoke the International Emergency Economic Powers Act to impose tariffs. On betting websites, the chance of a court ruling in Trump’s favor fell from 40% the previous day to less than 30%. Investors hope that if the “reciprocal tariffs” are lifted, U.S. stocks, especially technology stocks, will benefit.
In the automotive industry, which is hardest hit by tariffs, related stocks rose across the board, with Tesla rising 4%, and Ford and General Motors rising more than 2%. Caterpillar rose 4%.
Five of the seven largest technology stocks reported gains. Alphabet rose more than 2%. Its AI tool Gemini will support Apple’s Siri and is expected to generate more than $1 billion in annual revenue. Chip stocks almost rebounded, AMD rose more than 3%, Micron rebounded 8% after falling 7% the previous day, but Nvidia closed down after rising more than 1%. The market has recently questioned the high valuations of technology stocks.
“In the face of this scale, these staggering numbers, it’s right to have a healthy dose of skepticism,” said Seema Shah, chief global strategist at Principal Asset Management. “But as long as these companies continue to deliver results, the market should remain healthy.”
In terms of economic data, according to ADP statistics, U.S. private companies added 42,000 jobs last month, the first increase in four months and higher than market forecasts of 25,000 jobs. ADP chief economist Nela Richardson said wage growth has remained broadly stable for more than a year, indicating a balance between supply and demand in the labor market.
The U.S. service industry expanded at the fastest pace in eight months in October. The Institute for Supply Management (ISM) service industry index rebounded to 52.4 from 50.0 in September, exceeding market expectations of 50.8 and higher than the 50 line between expansion and contraction, setting an eight-month high. The data showed activity in the services sector, which accounts for more than two-thirds of the U.S. economy, continued to expand.
The new orders index jumped sharply to 56.2, a one-year high, indicating improving demand. However, recovering demand is accompanied by more obvious cost pressures. ISM’s price index rose to 70, a three-year high, and surveyed companies generally mentioned that tariffs have pushed up costs.
