On Thursday, stocks hit records on renewed optimism that the United States and China are inching closer to a “phase one” trade deal.
The Dow Jones industrial average climbed 0.8%, or 221 points, to close its trading day at 28,132.05. The broader Standard & Poor’s 500 added 0.9% to end at 3,168.57, closing at a fresh all-time high. The Nasdaq Composite also hit a record, gaining 0.7% to 8,717.32.
Wall Street has been watching closely for developments in the current trade negotiations. A new round of U.S. tariffs on Chinese goods is set to kick off on December 15. As a result, the prices of popular products, including laptops and cellphones, will rise.
Stocks moved higher in midday on Thursday. Because investors jumped on a statement from President Donald Trump that Washington is getting close to a “big deal” with Beijing. Following the tweet, all three major stock indexes hit intraday highs before paring gains.
Traders were also motivated by a report saying United States negotiators had reached the terms of a “phase one deal” with Beijing that awaited Trump’s approval.
Trade Negotiation Developments on Nearing Tariff Deadline
Since the start of 2018, the United States and China have imposed tariffs on billion-dollar-worth goods of each other. The United States had threatened to impose 15% levies on around $160 billion worth of Chinese imports on December 15.
For the global economy to remain resilient, analysts say that investors are looking for signs that the trade negotiations between the U.S. and China are de-escalating. The tariff battle threatens to raise costs for companies, which investors fear will further slow global economic activity.
Moreover, banks lead the gains as bond prices fell, sending yields higher. For example, Bank of America climbed 3.1%.
Technology companies made strong gains as well. This sector is extremely sensitive to swings in the trade as many of the companies rely on China for sales and supply chains. Cisco added 3.1%.