The rally on Wall Street continues as stocks again closed at record highs on Oct. 27 after the U.S. and China announced a potential trade deal.
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The benchmark S&P 500 index rose 1.2% to 6,875.16, its first close ever above the 6,800 level. The technology-laden Nasdaq index gained 1.9% on the day to finish trading at 23,637.46, bolstered by a rise in Nvidia (NVDA) and other microchip stocks. The Dow Jones Industrial Average increased 337.47 points, or 0.71% to close at 47,544.59.
All three of the major U.S. stock indices closed at all-time highs on Oct. 27, as did the Russell 2000 index of small-cap stocks. The rally occurred after U.S. Treasury Secretary Scott Bessent said, “I think we have a very successful (trade) framework” with China.
Chip Stocks Rally
The market rally was led by the stocks of chipmakers, a sector that has a lot to lose from tensions with China. Nvidia, as well as other chipmakers such as Broadcom (AVGO) and Qualcomm (QCOM), reached new all-time highs on the day. Shares of Advanced Micro Devices (AMD) also gained on news it will develop new supercomputers with the U.S. government.
However, the rally was not all-inclusive as stocks of rare earth miners fell sharply on reports of a delay in China removing its restrictions on exports of rare earth materials to the U.S. The markets are now preparing for the reporting of third-quarter financial results by major technology companies such as Microsoft (MSFT) and Apple (AAPL), among others.
Is the SPDR S&P 500 ETF Trust a Buy?
The SPDR S&P 500 ETF Trust (SPY) currently has a Moderate Buy rating among 504 Wall Street analysts. That rating is based on 413 Buy, 84 Hold, and seven Sell recommendations issued in the last three months. The average SPY price target of $757.74 implies 10.83% upside from current levels.
