Wall Street’s major indexes notched record highs to open the new year on Thursday, as fresh economic stimulus from China added to optimism fueled by easing trade tensions and an improving global outlook.
China’s central bank said on Wednesday it would cut the amount of cash that all banks must hold as reserves, the eighth such cut since early 2018. The move to inject fresh stimulus into the Chinese economy boosted equity markets around the globe.
The benchmark S&P 500 hit its 11th record high in 14 sessions and posted its largest daily percentage gain in three weeks. The Dow registered its biggest such gain in almost four weeks, and the Nasdaq its greatest in nearly three months.
Economic stimulus in China, along with the easing of trade tensions between Washington and Beijing, has bolstered optimism that the global economy will accelerate in 2020.
Among the S&P 500’s sectors, technology .SPLRCT and industrials .SPLRCI, both of which have high exposure to the Chinese economy, rose more than 1% and led in percentage gains. Shares of Apple Inc (AAPL.O), which have been a bellwether of trade sentiment, ended 2.3% higher and surpassed $300.
The lengthy rally on Wall Street has prompted some concerns that U.S. stocks are vulnerable to a pullback, especially if economic growth does not pick up as much as expected or if U.S.-China trade tensions reignite.
Adding to positive economic sentiment, data from the U.S. Labor Department showed the number of Americans filing claims for jobless benefits edged lower last week.
Other data from Greater China showing that gross gaming revenue in Macau fell less than expected in December boosted shares of U.S. casino operators. Shares of Wynn Resorts Ltd (WYNN.O), Las Vegas Sands Corp (LVS.N) and Melco Resorts & Entertainment Ltd (MLCO.O) rose between 2% and 4%.