Stocks rose on Friday after Chinese officials said China and the U.S. reached an agreement on the text of the phase one trade deal.
The Dow Jones Industrial Average were up 90 points, or 0.3%. The S&P 500 and Nasdaq Composite gained 0.3% and 0.4%, respectively. The major averages all hit record highs.
The next step is for both sides to go through legal steps and set a time for signing the deal, according to a CNBC translation. Chinese officials also said tariffs would be rolled back in phases. Agricultural purchases by the Chinese will increase, but officials did not specify by how much.
Friday’s move comes after The Wall Street Journal and CNBC reported Thursday the U.S. agreed to a so-called phase one trade deal with China in principle, citing sources.
As part of the deal, the U.S. would scrap additional levies set to take effect on Sunday. The U.S. also proposed cutting tariffs on $360 billion in Chinese goods by up to 50%. One of the sources also told CNBC that President Donald Trump was focused on how much in U.S. agricultural products China would purchase.
The Dow jumped more than 200 points while the S&P 500 closed 0.9% higher on Thursday. The Nasdaq Composite ended the day up 0.7%. All three touched record highs on Thursday.
Traders work on the floor of the New York Stock Exchange.
Spencer Platt | Getty Images News | Getty Images
Wall Street was headed for solid weekly gains in anticipation of a deal ahead of the Sunday tariff deadline. The S&P 500 and Nasdaq were both up 0.7% for the week while the Dow had gained 0.4% through Thursday.
However, China remained awfully quiet after news of the agreement broke. Official Chinese state media has yet to comment on the news. A source also told CNBC’s Eunice Yoon that China has concerns over hard agricultural purchases being pushed by the U.S. There are also worries that Trump could hit China with tariffs even after a deal is reached, the source said.
Stocks also fell Friday after Trump said a Wall Street Journal report on trade negotiations was “completely wrong.”
China and the U.S. have been fighting a trade war for nearly two years as the Trump administration tries to level what it sees as an uneven playing field. The trade war has dented business sentiment and has sparked volatile moves in capital markets.
Brexit boost
Stocks have been on a massive tear this year despite the lingering trade fears. Through Thursday’s close, the S&P 500 is up 26.4% for 2019. The Dow and Nasdaq are up 20.6% and 31.4%, respectively, this year.
Stocks also moved after exit polls showed the U.K.’s Conservative party winning a big majority in Parliament, giving Prime Minister Boris Johnson a clear path to move forward with his Brexit plans.
The British pound surged more than 2% against the U.S. dollar, hitting its highest level since the summer of 2018.
—CNBC’s Sam Meredith contributed to this report.
