U.S. stocks climbed Thursday after a report that U.S. officials could reduce the new tariffs on Chinese imports as part of trade negotiations between the two countries — the latest in a series of potentially conflicting updates on the trade dispute.
Citing sources close to the discussions, the Wall Street Journal said Treasury Secretary Steven T. Mnuchin and other officials are willing to lift some or all of the import taxes the U.S. announced last year. They're aiming to persuade Chinese leaders to make deeper reforms. However, U.S. Trade Representative Robert Lighthizer reportedly doesn't support the idea, and the proposals haven't been presented to President Trump.
Stocks wobbled earlier after reports late Wednesday that the U.S. might bring criminal charges against Chinese technology giant Huawei over allegations it stole trade secrets. However, China's government said the top trade envoys from both countries will meet in Washington at the end of this month, a possible sign of progress in negotiations.
After three months of big swings that were linked to trade talk developments, investors have adjusted to the uncertainty, said Gina Martin Adams, chief equity strategist for Bloomberg Intelligence. She said investors want hard data and clear answers about what international trade will look like.
“These issues between Huawei and trade have been a constant source of volatility and uncertainty that is weighing on sentiment,” she said. “Any permanence on the issue is going to be deemed an improvement.”
The Standard & Poor’s 500 index rose 19.86 points, or 0.8%, to 2,635.96. The Dow Jones industrial average jumped as much as 267 points after the report about the potential tariff cuts. It finished with a gain of 162.94 points, or 0.7%, at 24,370.10. The Nasdaq composite added 49.77 points, or 0.7%, to 7,084.46. The Russell 2000 index of smaller-company stocks climbed 12.55 points, or 0.9%, to 1,467.25.
Among tech companies, chipmaker Nvidia gained 1.9% to $151.72 and Advanced Micro Devices rose 2.6% to $20.25. Hard drive makers struggled, however. Western Digital lost 3.6% to $36.47 and Seagate Technology shed 2.5% to $38.73.
Industrial companies also stand to benefit from greater trade and faster economic growth. Defense contractors made strong gains after Trump called for a space-based missile defense system following a strategy review by the Pentagon.
Defense contractor Northrop Grumman gained 3.3% to $264.08 and Lockheed Martin rose 2.4% to $278.80. Aerospace company Boeing advanced 2% to $359.09.
Fastenal, which makes industrial and construction fasteners, jumped 5.9% to $57.34 after it said customers became a bit less cautious about spending in December.
Among healthcare companies, drugmaker AbbVie added 1.9% to $87.20 and medical device maker Becton Dickinson picked up 2.1% to $236.11 after it said it had a strong fiscal first quarter.
Like several other major financial companies, Morgan Stanley was hurt by difficulties in trading during the volatile fourth quarter. Although its traders are considered some of the best in the business, their stock trading revenue was flat over the last three months of the year, a period when the S&P 500 dropped 14%, and its bond trading revenue tumbled 30%. Morgan Stanley fell 4.4% to $42.53.
Signet Jewelers plunged 24.7% to $25.13 after it said its holiday season had been difficult and slashed its annual forecasts. The company said competition grew tougher in December and sales of some key products were weak. The company also said fewer customers came to its stores last month.
Big luxury retailers including department stores such as Macy's have said they struggled over the holidays even though consumer confidence is high and pay for workers is rising. The stock market's steep losses in December appear to have made some consumers reluctant to splurge.
All 11 S&P 500 sectors finished higher, but internet and communications companies, household goods makers and utilities lagged the rest of the market. Netflix rose 0.5% to $353.19, but after the close of trading its stock fell 3.2% after its fourth-quarter revenue and its first-quarter revenue forecast both came up short of analysts' expectations.
Bond prices edged lower. The yield on the 10-year Treasury note rose to 2.75% from 2.73%.
Benchmark U.S. crude oil fell 0.5% to $52.41 a barrel in New York, while Brent crude, the international standard, gave up 0.2% to $61.18 a barrel in London.
Wholesale gasoline rose 1% to $1.43 a gallon and natural gas added 0.9% to $3.41 per 1,000 cubic feet. Heating oil slid 0.5% to $1.88 a gallon.
Gold dipped 0.1% to $1,292.30 an ounce and silver lost 0.7% to $15.54 an ounce. Copper added 0.2% to $2.68 a pound.
The dollar rose to 109.23 yen from 108.92 yen. The euro slipped to $1.1390 from $1.1398.
The British FTSE slipped 0.4% and the CAC 40 of France fell 0.3%. Germany's DAX dipped 0.1%.