(Bloomberg) -- U.S. stocks pared gains sparked by trade optimism as doubt seeped into speculation that the Trump administration will delay tariffs on Chinese goods.
The S&P 500 remained higher but traded well off session highs as investors weighed whether Donald Trump and China will reach a partial deal to avoid tariffs due Sunday. A tweet from CNBC indicated that China may not agree to fixed farm purchases the U.S. is demanding in return for tariff relief. The index surged to a record earlier after the president tweeted that he’s “very close” to a deal. The 10-year Treasury yield spiked higher and the dollar rose.
The tweets are the latest in what’s been months of public proclamations by Trump’s administration that a deal with China is within striking distance. It comes three days before his plan to escalate the trade war unless at least a partial deal is reached. On Wednesday, the Federal Reserve held rates steady and signaled hikes remain unlikely, fueling bets that the economy will be strong enough to continue its solid expansion.
The gain in American stocks pushed the MSCI All-Country index to its first record since January 2018.
“People are finally recognizing that the U.S. is winning this trade war and corporate CEOs are going to begin to recognize that the U.S. economy is strong enough and is able to function well enough even with the current level of tariffs,” said Charlie Smith, founding partner and chief investment officer at Fort Pitt Capital Group.
In Europe, the central bank said it would maintain bond buying and keep rates low until it gets near its inflation goal. The euro rose and bonds in the region slipped. The Swiss franc nudged higher after the central bank left rates unchanged.
Earlier in the day, equities in Hong Kong and Seoul outperformed, while they slipped in Tokyo, Shanghai and Sydney. The Hong Kong dollar climbed into the stronger half of its trading band against the greenback for the first time since July. In the Middle East, Saudi Aramco (SE:2222) shares jumped for a second day, pushing the oil giant’s value beyond the $2 trillion mark.
Elsewhere, oil futures rose. The lira gained as the Turkish central bank delivered another interest-rate cut that exceeded forecasts.
These are the main moves in markets:
- The{ {166|S&P 500}} Index rose 0.5% as of 12:11 p.m. New York time.
- The STOXX 600 Index rose 0.3%.
- The U.K.‘s FTSE 100 Index gained 1.1%.