Stocks climb on China–US trade optimism; gold and silver slide

Global stocks climbed on Tuesday as signs of easing China-US trade tensions and a wave of upbeat corporate earnings lifted investor confidence, while gold and silver tumbled sharply on profit-taking.

Tokyo’s benchmark hit another record high as Japan swore in new prime minister Sanae Takaichi, ending a stretch of political uncertainty. The yen weakened on expectations that Takaichi will favor tax cuts and higher defense spending over further interest rate hikes.

On Wall Street, the Dow Jones Industrial Average surged to a fresh all-time high, supported by strong results from major industrial firms, while the Nasdaq edged slightly lower. General Motors jumped about 15 percent after reporting better-than-expected quarterly profits and raising its full-year guidance, helped by lower tariff costs.

“Earnings continue to be a buoy for this market,” said Tim Urbanowicz of Innovator Capital Management. “We clearly have an environment where companies have the ability to thrive. But valuations have run up to a point where there’s not a lot of room for bad news.”

In Europe, the Paris stock exchange hit record highs both intraday and at the close, lifted by a nearly 20 percent surge in Edenred shares after the financial services company posted stronger-than-expected sales. Across Asia, Hong Kong and Shanghai each closed more than one percent higher, buoyed by improving sentiment.

“The focus is now on US interest rate cuts, the new corporate reporting season, and the US-China trade talks,” said Russ Mould, investment director at AJ Bell. Investors are watching for Friday’s US inflation data for further clues on the pace of potential rate cuts.

Market optimism returned after last week’s turbulence, when US President Donald Trump threatened to impose 100 percent tariffs on Chinese goods in response to Beijing’s rare earth export controls. Trump has since struck a more conciliatory tone ahead of a possible meeting with Chinese President Xi Jinping at next week’s APEC summit in South Korea.

“I expect to seal a good trade deal with President Xi,” Trump said Tuesday, though he acknowledged the meeting was “not a sure thing.”

Meanwhile, precious metals fell sharply as investors took profits following recent record highs. Gold dropped more than six percent and silver slid over eight percent, pressured by a stronger US dollar and improved risk appetite.

“The drop was always going to come,” said Fawad Razaqzada, analyst at City Index and FOREX.com. “Several factors hit at once — optimism about a US-China trade truce, a rebound in the US dollar, and overall positive market sentiment.”

In currency markets, the British pound weakened after data showed UK public borrowing reached a five-year high in September.

Among corporate movers, Warner Bros. Discovery rose 11 percent after the company said it was considering selling all or part of its business following unsolicited interest from multiple parties.

Key figures at around 2015 GMT

New York - Dow: UP 0.5 percent at 46,924.74 (close)
New York - S&P 500: FLAT at 6,735.35 (close)
New York - Nasdaq Composite: DOWN 0.1 percent at 22,953.67 (close)
London - FTSE 100: UP 0.3 percent at 9,426.99 (close)
Paris - CAC 40: UP 0.6 percent at 8,258.86 (close)
Frankfurt - DAX: UP 0.3 percent at 24,330.03 (close)
Tokyo - Nikkei 225: UP 0.3 percent at 49,316.06 (close)
Hong Kong - Hang Seng Index: UP 0.7 percent at 26,027.55 (close)
Shanghai - Composite: UP 1.4 percent at 3,916.33 (close)
Euro/dollar: DOWN at $1.1606 from $1.1642 on Monday
Pound/dollar: DOWN at $1.3374 from $1.3405
Dollar/yen: UP at 151.91 from 150.75 yen
Euro/pound: DOWN at 86.78 percent from 86.84 pence
Brent North Sea Crude: UP 0.5 percent at $61.32 per barrel
West Texas Intermediate: UP 0.5 percent at $57.82 per barrel