S&P 500 Hits All-Time as U.S.-China Trade Truce Spurs Optimism

Wall Street kicked off July with a record high for S&P 500 index after a cease-fire in the U.S. trade war with China put investors in a buying mood.

The milestone marks the second time in less than two weeks that the benchmark index closed at a record high. The S&P 500 is now up 18.3% for the year.

The broad rally came after the world’s two biggest economies agreed over the weekend to resume negotiations. The truce, which involves the U.S. holding off on imposing new tariffs on $300 billion in Chinese goods, gave financial markets reason to breathe a little easier.

The S&P 500 index rose 22.57, or 0.8%, to 2,964.33. The index last set a record high on June 20.

The Dow Jones Industrial Average gained 117.47 points, or 0.4%, to 26,717.43. The Dow had been up 290 points. The Nasdaq composite rose 84.92 points, or 1.1%, to 8,091.16.

The Russell 2000 index of smaller company stocks added 3.09 points, or 0.2%, to 1,569.66.

The truce between the U.S. and China, along with some upbeat economic data, also helped push global shares higher.

Presidents Donald Trump and Xi Jinping hit the reset button in their trade negotiations over the weekend at the Group of 20 meeting in Osaka, Japan. Trump said the U.S. would hold off on plans to impose new tariffs on $300 billion in Chinese goods.

Mr. Trump also said he would allow U.S. companies to sell some components to Chinese telecommunications giant Huawei, which last month was placed on an American blacklist as a threat to national security.

Wall Street’s gains in the year’s first half were marked by months of volatile trading as investors rode the ups and downs of the trade war.

Technology stocks and banks accounted for much of the gains Monday as traders turned their backs on more defensive holdings, pushing bond and gold prices lower. Utilities and real estate stocks lagged the market in another sign that Wall Street had a bigger appetite for risk.

Chipmakers rallied on plans by the U.S. to loosen some restrictions on sales to Huawei. Broadcom climbed 4.3% and Micron Technology gained 3.9%. Technology giants Apple and Microsoft also rose.

Among financial services companies, Bank of America rose 1.4% and JPMorgan Chase gained 1.7%. Consumer product makers and other consumer companies also rose.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.03% from 2% late Friday.

Rising oil prices gave energy sector stocks a modest boost after OPEC agreed to extend current production levels for nine months. Baker Hughes gained 2.2% and ConocoPhillips added 2.1%.

The oil cartel faces weakening demand as global economic growth slows. The current deal to cut production is meant to help reduce oversupply and push prices higher.

Benchmark crude oil rose 62 cents to settle at $59.09 a barrel. Brent crude, the international standard, added 32 cent to close at $65.06 a barrel.

Wholesale gasoline gained 0.3 cents to $1.93 per gallon. Heating oil rose 1 cent to $1.95 per gallon. Natural gas fell 4 cents to $2.27 per 1,000 cubic feet.

Gold fell $24.40 to $1,389.30 per ounce, silver slid 15 cents to $15.19 per ounce and copper dropped 3 cents to $2.69 per pound.

The dollar rose to 108.46 Japanese yen from 107.78 yen on Friday. The euro weakened to $1.1286 from $1.1378.