Wall Street Climbs as Trade Optimism Fuels Energy Rally

U.S. stock indexes closed higher, driven by gains in energy stocks amid optimism over U.S.-China trade dynamics. Despite new tariffs, a tariff reprieve for Mexico and Canada boosted sentiment. Strong corporate earnings also supported the positive turn, although some companies struggled with the market's expectations.

The three major U.S. stock indexes experienced an uplift on Tuesday, largely propelled by energy stocks. Investors were emboldened by potential U.S.-China trade resolutions, as President Donald Trump deferred tariffs on Canada and Mexico. Despite new U.S. tariffs on Chinese imports and reciprocal measures from China, the atmosphere remained hopeful.

Energy stocks paved the way for S&P gains, surging 2.18%, as utilities and consumer staples weakened. Over the weekend, Trump suggested a 25% tariff on Mexican and Canadian goods but halted this action for 30 days, seeking border and crime concessions from these countries. Analysts suggested this move was more about claiming a temporary victory than substantial trade policy shifts.

Investor optimism was further buoyed by robust corporate earnings, with 76.8% of S&P 500 firms surpassing analyst expectations. However, some companies, including Alphabet and Estee Lauder, faced setbacks due to unmet forecasts and underwhelming performance. The Dow Jones, S&P 500, and Nasdaq all reported gains on the day.

(With inputs from agencies.)