American investors remain cautious in anticipation of the outcome of the US-China talks

The US stock market rose on Tuesday amid continued hopes for a positive outcome of trade negotiations between representatives of the United States and China. The S&P 500 index gained 0.6%, slightly behind the Nasdaq (+0.6%), while the Dow (+0.3%) continued to lag the rest of the indexes this month.

The trading session was generally calm, but it is worth noting that the market has twice resisted attempts to decline, each time returning to new intraday highs. President Trump‘s comment that Iran is becoming “much more aggressive“ in nuclear negotiations with the United States caused a short-term decline in the middle of the morning, which was quickly played back.

Later, Trade Minister Latnik said that negotiations with China were going very well and could continue tomorrow.

Ten sectors ended the day in positive territory, with the energy sector becoming the leader (+1.8%), despite the fact that oil failed to maintain morning growth and ended the session 0.5% lower at $64.96 per barrel. The growth was followed by the non–essential goods sector (+1.2%), which received significant support due to the continuation of yesterday‘s rebound in Tesla shares (TSLA 326,09, +17,51, +5,7%).

The technology sector, which has a lot of weight (+0.5%), kept pace with the broader market, hiding the growth among chip manufacturers: the PHLX Semiconductor Index added 2.1%, bringing the monthly increase to 10.2%. Intel shares (INTC 22.11, +1.63, +8.0%) showed relative strength amid growing optimism about new technological solutions in the field of chip production.

The industrial sector (-0.4%) was the weakest on the day due to profit-taking in defense companies after recent growth. At the same time, transportation stocks felt confident: the Dow Jones Transportation Average added 1.3% and returned to its May highs after Norfolk Southern (NSC 252.92, +2.35, +0.9%) announced a 5% increase in freight traffic since the beginning of the quarter.

Government bonds ended the day with a slight increase in yields at the far end of the curve and moderate losses on a short background ahead of tomorrow‘s publication of the consumer price index (CPI) for May (consensus Briefing.com : +0.2%).

The U.S. Treasury has placed $58 billion of three-year bonds with moderate demand. The placement of 10–year securities worth $39 billion will take place tomorrow.

On the economic data, only the NFIB Small Business Optimism index for May was published today, which rose to 98.8 from 95.8 in April.

Our American FTinvest 11 portfolio showed optimism almost all day today, peaking above 778. However, it was not possible to maintain a positive attitude until the end of the session, and at the end of the day there was a pullback to the “red zone”; as a result, the index closed with a loss of 0.08%, falling to the level of 773.28.