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The 30-stock Dow closed 166.50 points higher at 26,384.63, led by a 2.9% gain in Boeing. The S&P 500 climbed 0.2% to 2,879.39, notching its first six-day winning streak since February 2018, as the materials and energy sectors outperformed. The Nasdaq Composite, however, posted a 0.1% loss and closed at 7,891.78 as Tesla shares were under pressure.
Boeing's move higher came after Ethiopian investigators found the pilots in the Ethiopian Airlines flight that crashed last month were not responsible for the tragedy. CEO Dennis Muilenburg also said in a statement that the company is taking a "comprehensive, disciplined approach " to fix the airplane's software, which is suspected to have played a part in the crash.
The Wall Street Journal reported that Donald Trump expects to announce the date of a trade summit with Chinese leader Xi Jinping later in the day, lifting market sentiment. CNBC later reported, however, that sticking points like enforcement mechanisms on any agreed upon deal remain an issue.
The U.S. and China have imposed tariffs on billions of dollars' worth of one another's goods over the past year, battering financial markets and souring business and consumer sentiment.
Matt Lloyd, chief investment strategist at Advisors Asset Management, expects some sort of trade deal to be reached. This will boost equity prices, but volatility will persist as key issues like intellectual property theft will likely not be fully solved, he said.
"The trade deal is really two deals. First, you have the numbers, the tariffs and all that; that's the easy fix. Intellectual property on the other side, that's not going to be fixed right away. That's going to take a few years, in my opinion," said Lloyd.
Improvement in U.S.-China trade talks has boosted stocks to start off 2019. The S&P 500 is up more than 14% year to date, with technology stocks leading the way. A reversal in the Federal Reserve's policy stance has also lifted equity prices.
The Fed signaled at is March meeting it would not raise rates at all in 2019, a sharp pivot from the central bank's previous forecast of two rate hikes for the year. One key reason for the central bank's change is deteriorating economic data.
On Wednesday, the ISM services index fell to its lowest level since August 2017. Meanwhile, a private payrolls report disappointed investors. The Citi U.S. Economic Surprise Index — which tracks how economic data fares against estimates — has also dropped to its lowest level since July 2017.
"The market is certainly climbing the proverbial wall of worry," said Jeff Zipper, managing director of investments at U.S. Bank Private Wealth Management. "But that said, when you look at the internals in the domestic market … you're seeing industrial metals outperform precious metals; you're seeing consumer discretionary outperform consumer staples. That would lead investors to believe this market still has room to grow."
"However, after such a strong first quarter, you might have some sort of reversion to the mean before we go higher," Zipper said. "A lot of that will be based on what we see in earnings."
Tesla shares dropped 8.2% after the company said it delivered fewer-than-expected Model 3 cars in the first quarter. Facebook shares rose 1.4% after Guggenheim upgraded the social media company to buy from neutral, citing "stable" user trends and investors feeling more comfortable with the company's privacy issues.
— CNBC's Sam Meredith contributed to this report.
Clarification: This article has been updated to clarify that the Nasdaq Composite posted a 0.1% loss on Thursday's close.