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U.S. stock indexes jumped to new highs on Thursday, and Treasury yields rose, after President Donald Trump tweeted that a trade deal with China was “very close” and on a report that U.S. trade negotiators had offered to cancel a fresh round of tariffs on Chinese goods.

The S&P 500, Dow Jones Industrials and the Nasdaq opened lower then reversed after Trump’s statement, which comes just before tariffs are due to go into effect on Sunday. The indexes had slipped from record levels two weeks ago.

The Wall Street Journal reported U.S. negotiators have offered to slash existing tariffs by as much as half on roughly $360 billion of Chinese-made goods, supporting the bounce.

  • The S&P 500 briefly rose more than one percent to hit a record intraday high of 3,176.28 and was last up 0.87%.
  • MSCI’s all-country world index, tracking shares in 49 countries climbed to 551.84 points to surpass the previous record of 550.63 points set in Jan 2018.
  • The yield on the U.S. 10-year Treasury note rose to a four-week high and was last at 1.8974%, up from 1.79% late on Wednesday.
  • The U.S. dollar index was up about 0.3%.

Joe Saluzzi, co-manager of trading, Themis Trading, Chatham, N.J.:

“The market is definitely pricing in a trade deal, no question about it. You’ll probably get a ‘sell the news,’ since it’s already priced in. If there is no deal, that will be a big problem on Monday.”

“Even though it feels like we keep going up, up, up, a year ago we had a disaster in December. We got crushed. So when you look over a longer time period, it seems like a nice, steady path up to me.”

“We’re certainly on the upper end of a fair valuation. But if we get a good deal and take geopolitical risk out, why can’t we go higher?”

Art Hogan, chief market strategist at National Securities in New York:

“What this market has been trying to tell us is that we want to continue to work towards a deal. (From) October coming into last week was very much that ‘hey we are working on phase one’ so that is constructive. And constructive means that if we actually get a phase one deal done there is likely to be no further escalation from that point. That is the beginning of the end and the market sees that as returning some certainty to the economies and certainly to corporations. The big delta here has been that there is consumer confidence and a lack of corporate confidence and that is holding back corporate spending.”

“The market is saying we can remain constructive as long as you are working towards a deal. Escalation means bad things for both the market and the economy. That is what the market is telling us today.”

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