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.
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.
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.