Investing.com – Stocks shot up Thursday on hints that China wants to reduce the tension in its trade fight with the United States.
The major averages enjoyed their biggest one-day gains in about two weeks as investors and the algorithms that run the buying and selling programs for many big investment houses hit their buy buttons.
The S&P 500 rose 1.27%. The Dow Jones industrials climbed 1.25%, and the Nasdaq Composite added 1.48%. The Nasdaq 100 index, dominated by big tech stocks, added 1.51%.
The Dow's 326-point gain was its best one-day point gain since Aug. 13. The S&P 500 and Nasdaq point gains were their best since Aug. 16.
Gainers overwhelmingly outnumbered losers, with industrial, tech, financial and energy stocks enjoying the biggest gains.
Caterpillar (NYSE:CAT), exposed to global trade currents, rose 2.5% to lead the Dow. Dollar General (NYSE:DG) was the top S&P 500 stock. Best Buy (NYSE:BBY) was among the laggards. The electronics retailer buys many of its electronic products from China and many of these will be subject to new tariffs starting Sept. 1.
The rally was prompted by comments from China's Foreign Ministry that Beijing would not retaliate for now against President Donald Trump's latest tariff moves. But the spokesman also said China also wants to see some of those rolled back so that the two sides can negotiate in September.
The comments set off rallies in many markets around the world and pushed the Dow up as many as 373 points before some profit-taking set in.
Economic data released Thursday, especially a revised estimate of gross domestic product, proved benign. The Commerce Department put growth at an annualized 2% in the quarter, down slightly from the first estimate but in line with expectations.
Chip stocks were among the biggest gainers on the day, with Nvidia (NASDAQ:NVDA), Micron (NASDAQ:MU) and Qualcomm (NASDAQ:QCOM) among the top gainers in the category. Intel (NASDAQ:INTC), up nearly 2.4%, was the third-best Dow performer after Caterpillar and Home Depot (NYSE:HD). The Philadelphia Semiconductor Index rose 2.25%.
Energy stocks climbed as West Texas Intermediate crude reached $56.91 a barrel, up 1.67%. Brent closed at $60.49 a barrel. The Philadelphia Oil Service Sector Index rose nearly 2%.
Interest rates were higher, with the 10-Year yield rising to 1.506% from Wednesday's 1.468%. The yield was still lower than the yield on the 2-Year note, but the 10-2 Year Treasury Yield Spread narrowed to 2.76 basis points from Wednesday's 3.22 basis points.
Dollar General (NYSE:DG), PVH (NYSE:PVH), National Oilwell Varco (NYSE:NOV) and Marathon Petroleum (NYSE:MPC) were among the S&P 500 leaders. PVH owns many popular brands including Van Heusen, Tommy Hilfiger, Calvin Klein, IZOD and Arrow.
Tax-preparation company H&R Block (NYSE:HRB), Best Buy (NYSE:BBY), tobacco company Altria Group (NYSE:MO) and MarketAxess Holdings (NASDAQ:MKTX) were the S&P 500 laggards. MarketAxess operates an electronic financial trading platform.
Trading volume is likely to be light on Friday ahead of the Labor Day Weekend. U.S. markets will be closed on Monday.