Stocks rose broadly in afternoon trading on Wall Street, pushing major indexes toward another set of records, after China said it agreed with the United States on a gradual pullback on tariffs if talks progress.
The S&P 500 is heading for its second record-setting day this week. The Dow Jones Industrial Average and the Nasdaq are on pace for their third day of record highs.
Technology companies led the market. Qualcomm rose sharply after reporting solid earnings. The sector is prone to swings in trade relations as many of those companies rely on China for sales and supply chains.
Banks also rose after bond yields jumped. Higher yields allow banks to charge more lucrative interest rates on mortgages and other loans. Citigroup rose 1.7 per cent and JPMorgan Chase rose 1.3 per cent.
The yield on the 10-year Treasury rose to 1.94 per cent from 1.81 per cent late Wednesday. The big move signals confidence from investors as they shift away from safe-play holdings and take on more risk.
Real estate companies and utilities, also considered safer investments, lagged the market.
KEEPING SCORE: The S&P 500 index rose 0.3 per cent as of 2:50 p.m. Eastern time. The Dow Jones Industrial Average rose 233 points, or 0.8 per cent, to 27,726. The Nasdaq rose 0.4 per cent. The Russell 2000 index of small company stocks rose 0.7 per cent.
Markets in Europe and Asia also rose.
TRADING ON TRADE: The encouraging development in US-China negotiations is giving the market direction after a day of listless trading as investors absorbed the latest round of corporate earnings. Both nations have agreed to a truce, but the terms are still vague and they have yet to sign a deal.
The US-China trade war has been a top concern for investors since early 2018. Wall Street has been worried that tariffs will crimp corporate and economic growth.
BROKEN RECORDS: The S&P 500 has been on a steady rally for the past month, following the announcement of an initial US-China trade deal in early October.
Last week it notched three record-setting days as investors grew more encouraged about prospects for economic growth because of solid economic and earnings reports.
The rally also lifted the Dow and Nasdaq over the last two weeks to multiple records.
EARNINGS SCORECARD: It's a busy day for corporate earnings as the latest round of results nears the finish line. More than 85 per cent of companies within the S&P 500 have reported so far.
Chipmaker Qualcomm, which reported results late Wednesday, rose 7.9 per cent after beating analyst's profit forecasts. Several other winners included drug distributor Cardinal Health, which rose 5.1 per cent after reporting surprisingly good results. Ralph Lauren surged 13.2 per cent following its solid results.
Several companies that focus on travel were punished by investors after reporting weak results. TripAdvisor plunged 19.9% and Expedia plummeted 25.3 per cent.
HIGH TIDE: SeaWorld Entertainment surged 14.3 per cent after the theme park operator named an executive from the timeshare and resort industries as its new CEO. Sergio Rivera will lead the company months after the previous CEO abruptly resigned.
FIRE COSTS: Pacific Gas & Electric slid 8.6 per cent after reporting substantial losses for the third quarter, driven by catastrophic wildfires that have been blamed on the utility's outdated transmission lines. The company anticipates those costs could escalate to as much as $6.3 billion.