US Stocks Hit Record Highs on US-China Trade Deal Hopes
The S&P 500 and Dow Jones closed at records after officials held 'very constructive' talks and Trump targeted a 'complete deal' with Beijing.
Wall Street surged to new heights on Friday, with major indices closing at record highs as investor optimism swelled around the prospect of a significant de-escalation in the long-running U.S.-China trade war.
The rally was ignited by reports of progress in high-stakes negotiations and amplified by comments from President Donald Trump, who said he is targeting a "complete deal" with China. The Dow Jones Industrial Average jumped 472.51 points, or 1.01%, to close at 47,207.12. The S&P 500 gained 0.79%, finishing the day at 6,791.69, with both benchmarks setting new records.
The positive sentiment was anchored by diplomatic progress in Kuala Lumpur, Malaysia, where U.S. Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng concluded what officials on both sides described as "very constructive" talks. The discussions were aimed at paving the way for a crucial meeting between President Trump and Chinese President Xi Jinping at the upcoming APEC summit.
These negotiations are taking place against a tense backdrop. President Trump has threatened to impose 100% tariffs on a wide range of Chinese goods if a deal is not reached, a move that could significantly disrupt global supply chains. The talks are seen as a critical effort to avert that escalation and salvage a fragile trade truce set to expire on November 10, according to reports from The Economic Times.
President Trump's optimistic tone provided a significant boost to market confidence. Speaking to reporters, he framed the goal of his upcoming meeting with President Xi as nothing less than a "complete deal," shifting the narrative from temporary truces to a more permanent resolution. This rhetoric fueled a broad-based rally, with technology and industrial stocks, which are particularly sensitive to trade tensions, among the day's top performers.
While trade hopes were the primary driver, the market's upward momentum was also supported by encouraging domestic economic data. A recent report indicating that inflation was less severe than anticipated has bolstered expectations for potential interest rate cuts by the Federal Reserve, as noted by market analysts. This, combined with a series of strong corporate earnings reports, created a favorable environment for equities.
Still, analysts remain cautiously optimistic, aware that the situation remains fluid. The core issues of the trade dispute—including intellectual property protection, market access, and industrial subsidies—are complex and have been points of contention for years. A failure to make tangible progress at the presidential level could quickly reverse Friday's gains.
For now, investors are betting that the mutual economic pressure on both Washington and Beijing is sufficient to broker a meaningful agreement. The coming APEC summit will be closely watched for any concrete announcements that could signal a true turning point in the trade relationship between the world's two largest economies.