Wall Street's main indices hit records on reports of US-China trade deal

US stocks rose to records as optimism grew 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 after a Bloomberg report that U.S. officials had reached a deal in principle that only needed Trump’s approval. The president held an afternoon meeting with trade advisers, and a deal could be announced as soon as today, according to people briefed on the plans. A potential deal would likely prevent fresh levies due to take hold Sunday.
 

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.

“With the deadline coming up here in a few days, it’s not entirely a surprise that they are getting close to a deal or closing in on a deal,” said Ryan Nauman, a market strategist at Informa Financial Intelligence’s Zephyr. “I still would like to see signatures on paper before I completely jump in in terms of enthusiasm that a deal is done.”

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.