Chinese stimulus boosts mining stocks on Wall St

The S&P 500 and Dow ended at record highs on Tuesday, shrugging off weak consumer confidence data, as mining stocks surged following China's announcement of a sweeping stimulus package.

The indexes initially trimmed gains after a report from the Conference Board revealed an unexpected decline in US consumer confidence in September, driven by growing concerns about the labour market's health.

"Today's price action is predominantly about what happened overnight with the policy announcements from China, direct support for their equity market and pledges to cut interest rates in the future, has caused a really sharp move in international stocks in general," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

"That's feeding through into parts of the US market, where you see some more China-sensitive, more cyclical industries like metals and mining materials sector outperforming."

The Dow Jones Industrial Average rose 83.57 points, or 0.20 per cent, to 42,208.22, the S&P 500 gained 14.36 points, or 0.25 per cent, to 5,732.93 and the Nasdaq Composite gained 100.25 points, or 0.56 per cent, to 18,074.52.

Five of the 11 S&P 500 sectors traded higher, with material stocks outperforming peers with a 1.35 per cent rise.

Metal prices got a boost after the world's second-largest economy, China, unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk.

Copper and lithium miners rose. Freeport-McMoRan rose 7.93 per cent, Southern Copper added 7.22 per cent, Albemarle advanced 1.97 per cent and Arcadium Lithium climbed 3.2 per cent.

US-listed shares of Chinese firms such as Alibaba rose 7.88 per cent, PDD Holdings added 11.79 per cent and Li Auto advanced 11.37 per cent, tracking gains in the domestic market.

Megacap stocks were mixed, with Nvidia gaining 3.9 per cent, while Microsoft lost 1.15 per cent. The broader technology sector rose 0.79 per cent.

The Philadelphia SE Semiconductor Index was up 1.23 per cent as chip stocks Qualcomm and Intel rose 0.54 per cent and 1.11 per cent, respectively.

Meanwhile, Federal Reserve Governor Michelle Bowman cautioned that key inflation measures remained "uncomfortably above" the Fed's two per cent target, warranting caution as the Fed proceeds with cutting interest rates.

Weekly jobless claims and personal consumption expenditure data remain in focus this week.

Among stocks, Visa lost 5.49 per cent after the US Department of Justice sued the company for alleged antitrust violations. This weighed on the financial sector which slipped 0.92 per cent.

Advancing issues outnumbered decliners by a 1.93-to-1 ratio on the NYSE. There were 636 new highs and 43 new lows on the NYSE.

The S&P 500 posted 62 new 52-week highs and no new lows while the Nasdaq Composite recorded 103 new highs and 101 new lows.

Volume on US exchanges was 11.42 billion shares, compared with 11.60 billion average for the full session over the last 20 trading days.