Stocks finished firmly higher Friday as an apparent breakthrough in U.S.-China trade relations provided a tailwind to risk assets. The Dow rallied 319 points, briefly surpassing the 27,000 level. The S&P 500 rose 1.1%, snapping a three-week losing streak, while the Nasdaq Composite advanced 1.3%. For the week, the S&P 500 gained 0.6%, and the Dow and Nasdaq Composite both jumped 0.9%.
President Trump stated that the two sides had agreed to “a very substantial phase one deal.” Under the accord, Washington will suspend next week’s planned tariff increase, while Beijing would offer concessions related to agricultural purchases, intellectual property, and foreign exchange issues. President Trump said the pact could be signed as quickly as next month.
On the data front, an update from the University of Michigan showed consumer sentiment unexpectedly spiking to a three-month high in October. Treasuries slumped with the yield on the benchmark 10-year note advancing seven basis points to 1.73%. In commodities, WTI crude added 2.2% to $54.70/barrel, while COMEX gold slid 0.8% to $1,482.70/ounce despite a weaker dollar.
Eight of 11 S&P 500 sectors closed in positive territory, with Industrials and Materials pacing gains. Apple led a rally in Tech shares, with the iPhone maker climbing 2.7%, touching a record high. In earnings, Fastenal surged 17.2% after the industrial construction supplier exceeded analyst profit and revenue projections.
Overseas, signs of progress on the Brexit front helped push the British pound to its best two-day advance in a decade, while the Euro STOXX 600 climbed the most since January.