Wall Street stocks lifted by low inflation, earnings and trade war optimism

• The worse-than-expected inflation data on Thursday was cheered by stock investors.
• Investors have been ignoring stellar earnings so far.
• The US-China trade war is one the worst factors that can hamper stock growth.

​​​​​​US stocks ended the day with solid gains. The S&P 500 rose 0.94% to 2,723.07 while the Dow Jones Industrial Index gained 0.8% to 24,739.53. The tech-heavy Nasdaq Composite Index gained 0.89% to 7,404.98. 

The US indices are being boosted by several factors. The lower inflation reading on Thursday is seen as a positive for stocks as investors hope that the Fed will be more cautious in hiking rates. The 10-year Treasury yield benchmark traded below the 3% mark and the US Dollar Index had its worst daily decline since mid-March, suggesting that investors are rotating their assets from cash to stocks. 

The corporate earnings have been so far almost ignored by investor despite the fact that 78.7% of the companies have reported better-than-expected earning per share.

Meanwhile, crude oil WTI broke news highs not seen since November 2014 on Thursday as Trump pulled out the US from the Iran nuclear deal last Tuesday. This is giving the energy sector a strong boost. 

The big technology stocks such as Apple and Facebook are also leading the indices. 

On the geopolitical front, it has been reported on Thursday that the trade war between US and China is starting to abate. The prospect of a trade war is seen as a very negative factor for US stocks and any news of optimism between the two nations is cheered by investors. 

“The bears need to hibernate for a while because it looks like most of the geopolitical news has been priced in as well,” wrote Cavanaugh from the Wall Street Journal. 

S&P 500 daily chart