Stocks hit record high as U.S. and China edge closer to a trade deal
Stocks closed at record highs Thursday on reports that the U.S. and China have reached an agreement to delay new tariffs kicking in over the weekend.
The Wall Street Journal and Reuters reported that Washington has offered to slash existing tariffs on Chinese goods and cancel new ones in exchange for more agricultural purchases and intellectual property protection. A new round of U.S. tariffs is set to kick in on Sunday, potentially raising the price of popular products including laptops, cellphones and toys.
The S&P 500 rose nearly one percentage point, to 3,168, and the Nasdaq gained 0.7%, to 8.717 — both record highs. The Dow rose 220 points, or 0.8%, to 28,131.
Technology companies also made strong gains. The sector is one of the most sensitive to swings in trade because many of the companies rely on China for sales and supply chains. Cisco Systems climbed 3.1%.
Reports of a deal remove "a major dark cloud over the tech sector," Wedbush analyst Dan Ives said in a note on Thursday. "[I]f this tariff went through it would have been a major gut punch for semi players/Apple and could have thrown a major wrench into the supply chain and demand for holiday season."
Real estate companies, utilities and household goods makers lagged the market in another sign that investors were shifting money away from less risky investments.