Dow Jones Industrial Average rallies 182 points
The Dow gained 182.24 points, or 0.66% to close at 27,674.80. The S&P 500 gained 0.27% to end the day at 3,085.19. The Nasdaq Composite advanced 0.28% to 8,434,52. News that the U.S. and China are willing to roll back tariffs to reach a trade deal sparked a sharp rotation out of bonds and into stocks, propelling the major indexes to fresh record levels.
Trade news lifts stocks to records, crushes bonds
A Chinese Commerce Ministry spokesman said China and the U.S. agreed to simultaneously cancel some existing tariffs on one another’s goods, according to the country’s state broadcaster. A U.S. official also said both sides agreed to the tariffs rollback, according to Reuters. Wall Street interpreted the news as both sides making strong progress toward a trade deal being reached, pushing stocks to records. The move in stocks to all-time highs came at the expense of the bond market. The 10-year Treasury yield had its biggest upward move since the 2016 election, pushing down the price. To be sure, a U.S.-China trade resolution is not 100% certain at this point. Stocks lost some steam in late-afternoon trading after Reuters reported the tariff rollback is facing opposition within the White House.
Banks rise, Ralph Lauren surges
Bank stocks rose broadly along with yields. Bank of America closed 1.34% higher while Citigroup and J.P. Morgan Chase advanced 1.87% and 0.54%, respectively. Ralph Lauren, meanwhile, surged 14.66% on the back of quarterly results that easily beat analyst expectations.