Investors powered U.S. stocks to broad gains Thursday, cheering plans for another round of trade negotiations between Washington and Beijing, and drawing encouragement from a batch of positive economic data.
The Dow Jones Industrial Average surged nearly 400 points, bond yields jumped and the price of gold fell as investors regained a bigger appetite for riskier holdings.
The S&P 500 gained 38.22 points, or 1.3%, to 2,976. The benchmark index is now 1.7% shy of its most recent all-time high set in late July.
The Dow rose 372.68 points, or 1.4%, to 26,728.15. The average was briefly up by 480 points.
The Nasdaq climbed 139.95 points, or 1.8%, to 8,116.83. Traders also favored smaller company stocks. The Russell 2000 index picked up 25.99 points, or 1.8%, to 1,510.75.
Thursday’s rally took its cue from overseas markets, which also reacted positively to the news that negotiators from the U.S. and China have agreed to meet in early October.
The meeting would be the latest attempt to find a resolution to a trade war that has rattled global financial markets and threatened economic growth.
Stocks were also bolstered Thursday by positive economic data showing that companies are still hiring at a solid pace and that productivity rose at a healthy rate last quarter.
Payroll processor ADP reported that U.S. businesses added 195,000 jobs in August, well above economists’ expectations. The private report frequently diverges from the government’s own employment report, which is scheduled to be released Friday. Economists expect that report will show 160,000 jobs were added.
Meanwhile, the Labor Department reported that overall productivity rose 2.3% during the second quarter, also beating economists’ growth forecasts.
The positive report gave already rising bond yields an additional push. The yield on the 10-year Treasury note rose to 1.57% from 1.46% late Wednesday, a big move.
Technology stocks led the gains for a second day in a row as investors again fed a bigger appetite for riskier holdings. Chipmakers, which are especially reliant on doing business with China, rose. Intel gained 2.4% and Nvidia climbed 6.5%.
Banks moved broadly higher as bond yields rose, which gives them more leverage to charge higher interest rates on loans and garner more profit. JPMorgan Chase added 2.3% and Bank of America gained 3%.
Consumer-focused companies also rose broadly. Nike, which stands to benefit if the trade war ends sooner rather than later, added 2.4%. Amazon rose 2.2%.
Investors also bid up shares in companies whose latest quarterly results beat Wall Street’s forecasts.
Signet Jewelers surged 26.6%. The company, which operates Kay, Zales and Piercing Pagoda stores, also raised its own profit forecast for the year. G-III Apparel jumped 27.2% after the company, which owns DKNY and Wilson’s Leather brands, cited gains from its wholesale business during the quarter.
Stocks in Europe finished broadly higher as political developments in Britain point to a less chaotic exit from the European Union.