Stocks rose to record highs on Thursday after the world's two largest economies reportedly agreed to remove existing trade tariffs, sparking a huge rotation into equities and out of bonds.

The 10-year Treasury yield had its biggest upward move since the day after President Donald Trump was elected, trading at 1.95% from 1.81% in the previous session. Bond yields move inversely to prices.

"The overbought conditions of 2019 are now working their way off," said Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. "Are the outcomes going to be totally constructive? Probably not, but from a market perspective these markets have been craving for something different and they're getting it right now."

The Dow Jones Industrial Average climbed 182.24 points, or 0.7% to 27,674.80 as trade bellwethers Caterpillar and Boeing were both up at least 1%. The S&P 500 rose 0.3% to 3,085.18 as the financials sector gained 0.7%. Energy stocks also advanced 1.6%. The Nasdaq Composite, meanwhile, hit an intraday record of 8,483.16 before closing 0.3% higher at 8,434.52.

Bank of America shares rose 1.3%, fueled by the near 15-point surge in the 10-year U.S. rate. Citigroup and J.P. Morgan Chase climbed 1.9% and 0.5%, respectively.

Gao Feng, a ministry spokesperson for China's Commerce Ministry, said that both sides had agreed to simultaneously cancel some existing tariffs on one another's goods, according to the country's state broadcaster. The ministry spokesperson said that both sides were closer to a so-called "phase one" trade agreement following constructive negotiations over the past two weeks.

A U.S. official also said both sides agreed to the tariffs rollback, according to Reuters. The outlet also reported the plan faces fierce internal opposition in the White House, leading stocks to pare their gins slightly.

"This gets us closer to a phase one trade deal, which is more important psychologically than fundamentally," said Art Hogan, chief market strategist at National Securities. "It's not as though we're removing all tariffs and the economic drags dissipate, but what does dissipate significantly is the uncertainty."