Stocks jumped in early trading Thursday after President Donald Trump said China and the U.S. were zeroing in on a trade deal, lifting hope that an agreement will be reached before a key deadline.
The S&P 500 hit a record high, rising 0.9%. The Dow Jones Industrial Average traded 260 points higher, or 0.9%. The Nasdaq Composite advanced 0.8% and reached an all-time high.
Caterpillar shares jumped 1.3% while Micron Technology advanced nearly 3%. The VanEck Vectors Semiconductor ETF (SMH) and the iShares PHLX Semiconductor ETF (SOXX) both rose more than 1% and hit record highs.
Trump said in a tweet both sides were getting “VERY close to a BIG DEAL with China. They want it, and so do we!”
Stocks started December on the wrong foot as worries around U.S.-China trade relations increased. In the first two sessions of the month, the Dow lost more than 500 points.
The world’s two largest economies have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
Still, the major averages are up sharply for the year. The S&P 500 and Dow have jumped 25.3% and 19.7%, respectively, year to date. The Nasdaq is up around 30%.
Next year, however, should be tougher on Wall Street, CalSTRS CIO Christopher Ailman said.
“It will be choppy,” Ailman told CNBC’s Brian Sullivan in an interview that aired Thursday. “This is going to be another election year. Remember 2016? That was a really hard year where the market slugged it out to generate a positive return. We may have that kind of year because of all the rhetoric we’re going to hear.”