On Thursday, U.S. stocks increased thanks to positive news regarding the long-awaited “Phase one” deal. Based on the information, the U.S. and China are close to reaching the agreement.
U.S. negotiators prepared the terms of the deal for President Donald Trump’s review. On Thursday, the media reported that U.S. negotiators are willing to cancel new tariffs. Also, they are ready to reduce existing duties on Chinese products by up to 50% on $360 billion worth of imports.
It is important to keep in mind that the latest news comes only several days ahead of the Sunday deadline. Starting from December 15, the U.S. will impose additional tariffs if the negotiations process ends without agreement.
Hopefully, earlier in the day, President Trump commented on his Twitter account. According to twitter, the U.S. and China were getting close to signing this deal. The major indexes reached record highs after his tweet.
The trade dispute between the U.S. and China dates back to 2018. The disagreement between the two largest economies in the world created numerous problems for the financial markets. Moreover, protracted trade war influenced consumer sentiment as well as business activities.
Stocks in December
At the beginning of the last month of 2019, stocks experienced problems due to worries around U.S.-China trade relations. In the first two sessions of the month, the Dow Jones lost more than 500 points.
Nevertheless, the major averages increased in 2019. For example, the S&P 500 jumped 26.4%. Meanwhile, the Dow Jones Industrial Average rose 20.6% year to date. The Nasdaq gained around 31%.
Let’s have a look at the stocks on Thursday. The S&P 500 added 0.9% to end the trading day at 3,168.57. It broke the record. At the same time, the Nasdaq Composite also posted an all-time closing high. This index gained 0.7% to 8,717.32.
The Dow Jones Industrial Average closed 220.75 points higher or 0.8% at 28,132.05. On Thursday, all of the major averages mentioned above, reached intraday records. This happened for the first time since November 27.