Wall Street close: Benchmarks make records on phase-one deal hopes, war de-escalation and Fed on hold

US benchmarks shrugged off the persistent concerns over the Persian Gulf on Thursday, making hay while the sun shines, following the deflationary address from President Donald Trump earlier this week. US stocks rallied to all-time highs on news that the US and China will indeed sign a phase-one deal next week. 

China's top trade negotiator, Vice Premier Liu He, is leading his trade delegation to Washington next week to sign a phase-one trade deal, the first official confirmation from China of these plans. Subsequently, the Dow Jones Industrial Average, DJIA, added 213 points, or 0.7% to about 28,958 while the S&P 500 index rallied around 22 points, or 0.7% to close down the session at 3,275. The Nasdaq Composite index ended at about 9,203 after adding 74 points, or 0.8%. 

Elsewhere, we had a series of Federal Reserve speakers, some rotating onto the voting board and some which were non-voting this year. All in all, markets are of the mind that the Fed is on hold for this year, which is also giving stocks a boost. 

In corporate news, Apple Inc. AAPL, +0.03% shares notched new record following an upbeat report on iPhone sales in China, a jurisdiction where it had been struggling to maintain sales. Also, Kohl's Corp. KSS, -0.09% was the S&P's worst performer – the retailer reported declining same-store holiday sales.

Looking ahead, NFP showdown (Friday)

FXStreet Senior Analyst, Joseph Trevisani, explained in his conclusion to US Non-Farm Payrolls December Preview:  All systems go, Payrolls exhibit no inference of slacking job production.

"The slide in business sentiment which has been the primary negative indicator for the labor market has been a single event focused on the US-China trade dispute.  Presumably the deal to be signed on January will remove that concern from business planning even if it does not solve all of the problems between the two nations.

Coincident labor market indicators, initial jobless claims, wages, and unemployment rates and general economic factors from steady GDP growth to robust consumption all point to a continuation of the job creation rates of the past year.

With central banks from Washington to Ottawa, London to Canberra on hold, economic statistics will be the determining factor for currencies.  In that competition American labor production should soon return the gloss to the US dollar."

DJIA levels