All three major U.S. stock indexes closed well below session highs as risk appetite cooled

The S&P 500 and the Nasdaq closed higher on Wednesday while gold resumed its ascent as investors weighed upbeat earnings against mounting trade tensions between China and the US.

All three major U.S. stock indexes closed well below session highs as the day progressed and risk appetite cooled. The blue-chip Dow ended the day with a nominal loss.

Crude prices strengthened earlier gains and safe-haven gold hit new highs as Washington and Beijing ramped up the rhetoric in their ongoing tariff dispute.

U.S. President Donald Trump said he was considering cutting some trade ties with Beijing in response to China not buying U.S. soybeans. This followed China’s ramped-up restrictions on crucial rare earth exports.

U.S. Trade Representative Jamieson Greer commented on China’s move on Wednesday, calling its expansion of rare earth export controls “a global supply-chain power grab,” but along with Treasury Secretary Scott Bessent, stressed that Washington did not want to escalate the conflict.

There’s fear out there and we really don’t know how tariffs and the slower employment is going to affect consumer spending and company financials going forward, said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.

I hope they get together and find a solution that is amenable to both parties, because this escalation isn’t good for markets. It’s probably not good for either economy, he said.

Earlier in the session, upbeat third-quarter results from Morgan Stanley and Bank of America buoyed investor sentiment.

MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 1.95%, to 708.31.

In Europe, the STOXX 600 index advanced 0.57%, while broad FTSEurofirst 300 index gained 14.31 points, or 0.64%.