Investing.com - The S&P 500 closed near record highs on Wednesday, led by a rally in bank shares on surging bond yields, while fears about an escalating trade war between the U.S. and China eased.
The Dow Jones Industrial Average rose about 0.61%. The S&P 500 rose 0.13%, while the Nasdaq Composite fell 0.08%.
The 10-year Treasury Note yield rose to its highest level since May, lifting bank shares and locking in a day of gains on Wall Street.
Goldman Sachs (NYSE:GS), Citigroup (NYSE:C) and Bank of America NYSE:BAC) closed around 3% higher.
Rising Treasury yields are seen as boon for banks, boosting their net interest margin, the difference between the interest income generated by banks and the amount of interest paid out to their lenders.
In contrast, utilities, which serve as a bond proxy, fell sharply as a rise in bond yields made them less attractive to income-seeking investors.
Sentiment on stocks was also helped by easing investor fears that the recent round of tariffs launched by the United States and China would set both nations on a path to a full-blown trade war.
Chinese Premier Li Keqiang said Wednesday trade disputes "need to be worked out through consultation," and stressed the importance of "upholding the basic principles of multilateralism and free trade."
China said Tuesday it would impose new tariffs on U.S. goods worth $60 billion on Sept. 24. The trade barb arrived after the Trump administration announced the U.S. will impose 10 percent tariffs on $200 billion in Chinese goods next week.
Boeing (NYSE:BA) and Caterpillar (NYSE:CAT) stocks, which have been swayed by trade-war tensions given their significant exposure to China, rallied to end the day higher.
Elsewhere, tech struggled to maintain its rich vein of form as Microsoft and Amazon came under pressure.
Amazon.com Inc (NASDAQ:AMZN) fell nearly 1% as the European Union opened a preliminary anti-trust investigation on concerns the retailer may gaining a competitive advantage by using data it gathers from third-party sellers on its platform.
The e-commerce giant pared some losses moments before the close on a report of plans to open up to 3,000 cashierless stores by 2021.
Microsoft (NASDAQ:MSFT) dropped 1.3% as it raised its quarterly dividend nearly 10%.
Energy, meanwhile, also played a role in lifting the broader markets, as oil prices surged on data showing domestic oil supplies fell to multi-year lows.
On the New York Mercantile Exchange crude futures for November delivery rose by 1.8% to settle at $71.12 a barrel.
In corporate news, Tilray (NASDAQ:TLRY) stock ended the day 38% higher after rallying as much as 90% on a short-squeeze and positive remarks from the company's CEO in an interview with CNBC. The stock had to be halted from trading on several occasions in volatile trading.
Top S&P 500 Gainers and Losers Today:
BorgWarner (NYSE:BWA), Newfield Exploration (NYSE:NFX) abd eTrade (NASDAQ:ETFC) were among the top S&P 500 gainers for the session.
CMS Energy (NYSE:CMS), Scana (NYSE:SCG) and Equifax (NYSE:EFX) were among the worst S&P 500 performers of the session.