China’s stimulus boosts S&P 500, Dow

China's boost
China's boost

The S&P 500 and Dow Jones Industrial Average closed at record highs on Tuesday. Investors digested China’s aggressive stimulus measures and a notable dip in US consumer sentiment. The tech-heavy Nasdaq Composite rose 0.56%, leading the day’s gains.

The S&P 500 was up 0.25%, hitting its 41st record close of the year at 5,733.03. The Dow Jones Industrial Average edged up 0.1% to close at a record 42,208.41. Stocks recovered from a brief dip following new data from The Conference Board.

It showed a drop in consumer sentiment to 98.7, down from 105.6 in August. This was lower than the 104 expected by economists surveyed by Bloomberg. The highlight of the day came from China.

The government launched its most aggressive stimulus package since the pandemic. This move boosted US-listed stocks of Chinese e-commerce companies like Alibaba, Pinduoduo, and JD.com. They all saw significant gains.

Shares of Visa sank about 5% after the US Department of Justice sued the credit card giant for antitrust violations.

China’s stimulus lifts US stocks

The DOJ accuses Visa of stifling competition by threatening high fees and offering large payoffs to deter competitors.

JPMorgan Chase CEO Jamie Dimon expressed concerns about worsening geopolitical conditions. He suggested they could hinder efforts to control inflation. In an interview with CNBC TV18 at a JPMorgan conference in Mumbai, Dimon highlighted recent attacks by Yemen’s Houthi rebels in the Red Sea as an example of growing risks in the energy supply chain.

The Conference Board reported that consumer confidence fell sharply from August to September. This marked the largest month-over-month decline since August 2021. The labor market differential dropped to its lowest level since March 2021.

While China’s new stimulus package led to a surge in Chinese stocks, some experts remain cautious. Charles Schwab’s chief global investment strategist Jeffrey Kleintop warned that previous rallies in Chinese equities driven by stimulus hopes have often fizzled out quickly. Intel stock rose nearly 2% following the announcement of new products, including the Xeon 6 CPU and Gaudi 3 AI accelerator.

These new chips promise improved performance and power efficiency. Starbucks was downgraded by Jefferies analyst Andy Barish. He cited uncertainty over the next 12 months as the company undergoes a turnaround under new CEO Brian Niccol.

Barish predicted that Starbucks would face operational challenges and that its fiscal fourth quarter and fiscal year 2025 guidance might disappoint.

Maya Johnson

Maya is the editor-in-chief of KillerStartups.com. She provides value to early-stage entrepreneurs through content and her weekly newsletter. Reach her at [email protected]

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