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 0.7%. The Dow Jones Industrial Average traded 200 points higher, or 0.7%. The Nasdaq Composite advanced 0.4%.
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!”
His tweet comes after Reuters reported that Trump was meeting with his top trade officials on Thursday ahead of a Sunday trade deadline. If an agreement is not reached by then, additional U.S. levies on Chinese products will take effect.
Reports from Bloomberg News and The Wall Street Journal suggested earlier in the week that the U.S. could delay those additional tariffs. However, National Economic Council Director Larry Kudlow said Tuesday the charges were “still on the table.”
President Donald Trump takes part in a cabinet meeting in the Cabinet Room of the White House in Washington, DC on November 19, 2019.
Mandel Ngan | AFP | Getty Images
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.”
Jobless claims hit more than 2-year high
Weekly jobless claims jumped last week by 49,000 to 252,000, the Labor Department said. That is their highest level since the week that ended Sept. 30, 2017.
The data comes after the Federal Reserve held interest rates steady on Wednesday. The central bank also indicated it would likely not make any policy changes through at least 2020. The U.S. central bank’s decision to keep borrowing costs unchanged was unanimous, following several dissents in recent meetings.
“This is as hardened a ‘wait and see’ stance as we have seen in many years, and is particularly striking since so many of the crucial macro issues are yet to be resolved,” Michael Shaoul, chairman and CEO of Marketfield Asset Management, said in a note.
The Fed’s announcement lifted stocks slightly but uncertainty around trade has pressured stocks this week. The major averages are marginally lower week to date entering the session.
—CNBC’s Sam Meredith contributed to this report.
