U.S. Stocks Rise on Fresh Optimism Over China Deal: Markets Wrap

Claire Ballentine and Vildana Hajric
U.S. Stocks Rise on Fresh Optimism Over China Deal: Markets Wrap

(Bloomberg) -- U.S. stocks rose to records on optimism that the Trump administration will clinch a deal with China on trade and avert fresh tariffs. The pound fell ahead of the first exit polls in the U.K. general election.

The S&P 500 rallied following a Bloomberg report that American officials had reached a deal in principle that only needed Trump’s approval. Shortly after U.S. markets closed, news broke that the president had signed off on the agreement to avert tariffs set for Dec. 15.

A breakthrough on trade would remove a major overhang for equity investors just a day after the Federal Reserve signaled it is no rush to raise interest rates as the economy shows steady improvement. Trade headlines whipsawed stocks all day, as investor optimism rose and fell with the latest negotiation-by-tweet.

Thursday’s gain in American stocks pushed the MSCI All-Country index to its first record since January 2018. The spike in Treasury yields boosted financial stocks, lifting the S&P 500 Financial index past its closing high from May 2007.

In Europe, the central bank said it would maintain bond buying and keep rates low until it gets near its inflation goal. The Swiss franc nudged higher after the central bank left rates unchanged. The pound fell as U.K. voters went to the polls.

Elsewhere, Saudi Aramco shares jumped for a second day, pushing the oil giant’s value beyond the $2 trillion mark. Oil futures rose. The lira gained as the Turkish central bank delivered another interest-rate cut that exceeded forecasts.

These are the main moves in markets:

Stocks

The S&P 500 Index rose 0.9% at 4 p.m. New York time.The Dow Jones Industrial Average jumped 0.8%.The Stoxx Europe 600 Index rose 0.3%.The MSCI All-World Index rose 0.8% to a record.The MSCI Asia Pacific Index rose 0.6%.

Currencies

The Bloomberg Dollar Spot Index was flat.The euro was flat at $1.113.The British pound lost 0.2% to $1.3166.The Japanese yen fell 0.7% to 109.35 per dollar.

Bonds

The yield on 10-year Treasuries rose 11 basis points to 1.897%.The two-year Treasury rate added five basis points to 1.66%.Germany’s 10-year yield spiked to -0.27%.

Commodities

West Texas Intermediate crude climbed 0.9% to $59.31 a barrel.Gold futures fell 0.1% to $1,474.20 an ounce.

--With assistance from Jeremy Herron and Sam Potter.

To contact the reporters on this story: Claire Ballentine in New York at cballentine@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Sam Potter

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