U.S. stock markets showed modest gains on Tuesday, hovering just below their all-time highs as investors closely monitored ongoing trade negotiations between the United States and China.
By early afternoon, the S&P 500 was up by 0.3%, the Dow Jones Industrial Average had risen 73 points (0.2%), and the Nasdaq Composite had also climbed 0.3%. The upward movement comes as optimism builds over the outcome of trade talks, which continued into a second day between the world’s two largest economies.
Markets have significantly rebounded from a nearly 20% plunge seen two months ago. That drop was triggered by former President Donald Trump’s abrupt imposition of sweeping tariffs. The recovery was largely driven by hopes that a series of trade agreements would lead to a rollback of those tariffs. The S&P 500 is now within 2% of its record high set in February.
As trade negotiations carry on—reportedly addressing a wide range of bilateral disputes—U.S. Commerce Secretary Howard Lutnick remarked that the discussions were “going well” and expected to continue throughout the day in London. While both nations have temporarily paused the implementation of new tariffs, the lingering uncertainty continues to weigh on businesses.
One such example is Designer Brands, the parent company of DSW, Keds, and Jessica Simpson, which withdrew its 2025 financial outlook citing concerns about global trade policies. The company reported a deeper-than-expected quarterly loss, and its revenue fell short of projections. CEO Doug Howe highlighted ongoing volatility and weakened consumer discretionary spending as major challenges. The company’s shares dropped sharply by over 21%.
Still, some economic indicators offered glimmers of optimism. A recent survey on small business sentiment in the U.S. showed a slight improvement in May. According to Bill Dunkelberg, chief economist at the National Federation of Independent Business, while economic growth remains uneven due to unresolved uncertainties, small business owners have expressed improved expectations for future business conditions and sales.
On Wall Street, not all corporate results were negative. J.M. Smucker’s latest quarterly earnings exceeded analyst forecasts, but a disappointing revenue figure and a weaker profit outlook for the upcoming year dragged its shares down nearly 15%.
Tesla shares rose 4% after a recent slump caused by tension between Elon Musk and the federal government. Investors appeared more optimistic as fears of political retaliation eased.
Shares of Taiwan Semiconductor Manufacturing Co. (TSMC) also gained 2.4%, following a report that its May revenue surged almost 40% year-over-year, signaling strong demand in the chip sector.
Casey’s General Stores saw its stock jump by 11.6% after the Iowa-based convenience store chain posted stronger-than-expected quarterly profits, driven by solid sales of hot food items like sandwiches.
Globally, stock markets were mixed with relatively small changes. Germany’s DAX dropped 0.8%, while South Korea’s Kospi edged up by 0.6%.
In the bond market, the yield on the 10-year U.S. Treasury note dipped slightly to 4.47%, down from 4.49% the previous day, reflecting a cautious investor mood amid ongoing economic uncertainty.
