US stocks at record highs on signs of trade thaw

Wall Street’s three main equities gauges closed at simultaneous record highs, and Treasury bonds sold off, following reports the US and China agreed in principle to remove some tariffs imposed during their trade spat.

The S&P 500 finished 0.3 per cent higher at 3,085.18, about seven index points higher than its previous peak close on Monday.

The Nasdaq Composite rose 0.3 per cent and the Dow Jones Industrial Average advanced two-thirds of 1 per cent to have them extend their record run.

Bonds sold off, driving yields higher, as investors became more optimistic a resolution to the trade deal would revive global economic growth. The yield on the benchmark 10-year US Treasury rocketed 10.7 basis points higher to 1.919 per cent, while that on the policy-sensitive two-year was up 6.6bp to 1.6753 per cent.

China’s commerce ministry spokesperson told reporters in Beijing on Thursday negotiators from the two countries had agreed “to remove some of the additional tariffs in phases”, according to China’s state media, adding the gradual removal of those levies “can help to stabilise market expectations.”

That helped soothe nerves following a report by Reuters on Wednesday saying a meeting between Donald Trump and his Xi Jinping, his Chinese counterpart, to sign a “phase one” trade deal that had originally been lined up for this month would be delayed until December.

European markets were also buoyed by the reports of tariff removal. The continent’s broad Stoxx 600 was up 0.3 per cent, Germany’s Dax jumped 0.8 per cent and London’s FTSE 100 added 0.1 per cent.

In Asia, Hong Kong’s Hang Seng index turned to close 0.6 per cent higher. The CSI 300 of Shanghai- and Shenzhen-listed stocks added 0.2 per cent. In Japan, the Topix was holding at a one-year high and the Kospi in South Korea was flat.

China’s onshore renminbi reversed earlier declines to swing below the 7 threshold. The currency was 0.3 per cent stronger at Rmb6.9746 per dollar, after crossing below the key seven to the buck level in the week.

The dollar index, a measure of the greenback against a basket of peers, was 0.2 per cent firmer to 98.127.

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Markets Briefing is a concise look at global markets, updated throughout the trading day by Financial Times journalists in Hong Kong, New York and London. Feedback? Write in the comments below or send us an email.

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