The S&P 500 finished with its first weekly gain in four weeks Friday as investors welcomed a thaw in the punishing trade war between the U.S. and China.
After two days of negotiations in Washington, the U.S. agreed to suspend a planned hike in tariffs on $250 billion of Chinese goods that had been set to kick in Tuesday. Beijing, meanwhile, agreed to buy $40 billion to $50 billion in U.S. farm products.
Word of the trade concessions filtered out in the last half-hour of trading and pushed the Dow Jones Industrial Average 517 points higher, though the momentum faded near the close.
"The market is welcoming any progress here, because (trade) has been the biggest overhang on growth," said Ben Phillips, chief investment officer at EventShares. "Any sort of deal, even if it's a super light, mini-deal, still gets the market constructive and saying, 'OK, we're moving in the right direction.'"
The S&P 500 index closed higher for the third-straight day, adding 32.14 points, or 1.1%, to 2,970.27. Earlier it had been up 1.9%. The Dow rose 319.92 points, or 1.2%, to 26,816.59.
The Nasdaq gained 106.26 points, or 1.3%, to 8,057.04. The Russell 2000 index of smaller company stocks outpaced the broader market, climbing 26.54, or 1.8%, to 1,511.90. The indexes all notched gains for the week.
Treasury yields rose as investors felt less need for safety and dumped bonds. The yield on the 10-year Treasury, a benchmark for mortgages and many other kinds of loans, jumped to 1.73% from 1.65% late Thursday.
The rally got going early, reflecting optimism among investors that Washington and Beijing would reach at least a limited deal on trade. The U.S.-China trade dispute has been a drag on economic growth and slowed manufacturing around the world.
Investors got encouragement from President Donald Trump, who said "Good things are happening," before meeting with Chinese Vice Premier Liu He for trade talks at the White House.
Later in the day, after emerging from the meeting to announce the partial trade deal, Trump told the Chinese delegation "You're very tough negotiators."
The White House said the two sides made some progress on the thornier issues, including China's lax protection of foreign intellectual property. But more progress will have to be made on key differences in later negotiations, including U.S. allegations that China forces foreign countries to hand over trade secrets in return for access to the Chinese market.
Markets around the world have swung sharply on every morsel of progress or dissonance dribbling out about the U.S.-China trade war.
The concessions agreed upon by the U.S. and China Friday mark a sharp turnaround after expectations were lowered earlier in the week when the U.S. blacklisted a group of Chinese technology companies over alleged human rights violations.
Benchmark crude oil also rose $1.15 tFriday o settle at $54.70 a barrel. Brent crude oil, the international standard, gained $1.41 to close at $60.51 a barrel. The rise in energy prices lifted oil and energy services companies. Exxon rose 1.1% and Schlumberger climbed 4.5%.