U.S. stocks surge on U.S.-China trade deal optimism

U.S. stocks finished broadly higher Tuesday as investors grew more optimistic about the prospects for a resolution to the costly trade dispute between the U.S. and China.

Technology, financial and health care stocks powered much of the rally, which gave the benchmark S&P 500 index its biggest gain this month and a three-day winning streak. The wave of buying also drove a 372-point gain for the Dow Jones Industrial Average, ending the average’s four-day run of losses.

President Donald Trump said Tuesday that he might let a March 2 deadline slide in trade talks with China if the two countries get close to a deal. Earlier, the White House had called the date a “hard deadline.”

Both nations are trying to reach a deal before March 1. That’s when additional tariffs will kick in, escalating the conflict and further hurting companies and consumers with higher prices on materials and products.

The S&P 500 index gained 34.93 points, or 1.3 percent, to 2,744.73. The Dow climbed 372.65 points, or 1.5 percent, to 25,425.76. The index was briefly up by 405 points.

The Nasdaq composite rose 106.71 points, or 1.5 percent, to 7,414.62. The Russell 2000 index of smaller-company stocks, which has been leading the other indexes this year, added 19.25 points, or 1.3 percent, to 1,538.23.

European markets finished higher.

Stocks got an early boost Tuesday after lawmakers in Washington reached a tentative deal to avoid another partial government shutdown. The agreement on border security involves far less money for a wall than the White House wanted, and it’s not clear whether Trump will support the deal.

Still, the move alleviated some uncertainty for the market as the U.S. and China continue trade negotiations, which resumed Monday.

Fears of a global slowdown still linger. Europe and China have both reported slower growth. Those concerns have dimmed the outlook for corporate earnings growth this year.

The latest company earnings season has featured solid profit growth for the final three months of 2018, but caution about conditions going forward. Analysts predict profits will fall in the current quarter, according to FactSet.

Investors continued to size up the latest batch of corporate earnings Tuesday.

Technology stocks helped power the market’s gains Tuesday. Micron Technology climbed 4.7 percent. Financial companies also notched big gains. Brighthouse Financial surged 13.9 percent.

U.S. benchmark crude rose 1.3 percent to settle at $53.10 per barrel in New York. Brent crude, the standard for international oil prices, gained 1.5 percent to close at $62.42 per barrel in London.

Bond prices fell. The yield on the 10-year Treasury rose to 2.68 percent from 2.66 percent late Monday.

The dollar rose to 110.52 yen from 110.40 yen on Monday. The euro strengthened to $1.1331 from $1.1276.

Gold added 0.2 percent to $1,314 an ounce. Silver was little changed at $15.69 an ounce. Copper dropped 0.6 percent to $2.77 a pound.

In other energy futures trading, wholesale gasoline added 0.6 percent to $1.43 a gallon. Heating oil climbed 0.9 percent to $1.90 a gallon. Natural gas gained 1.7 percent to $2.69 per 1,000 cubic feet.