U.S. stocks surged to new records Thursday propelled by reports the U.S. and China had reached at trade deal to avoid new tariffs due on Sunday, and roll back existing levies, in exchange for purchases of American agricultural products.

The benchmark S&P 500 and Nasdaq Composite indexes closed at record highs while the Dow Jones Industrial Average saw a new intraday record.

The Dow Jones Industrial Average DJIA, +1.33% closed 220.75 points, or 0.8% higher, at 28,132.05, just shy of a new all-time high. The S&P 500 index SPX, +1.59% gained 26.95 points, or 0.9%, to close at 3,168.58, and the Nasdaq Composite Index COMP, +2.26% added 63.27 points, or 0.7%, to 8,717.32, both new records. The Russell 2000 RUT, +1.59% gained 15.63 points, 1%, to close at a new all-time high of 1,647.56.

What’s driving the market?

The president said on Twitter Thursday that the U.S. and China were nearing a “big deal” that could avoid fresh tariffs, planned to go in effect Dec. 15, and potentially roll back some existing duties, sending U.S. stocks within reach of record levels.

Stocks retreated from those intraday records, but again drifted higher after Bloomberg reported that an interim “phase-one” agreement had been reached, and awaited signature from the White House.

An earlier report from the Wall Street Journal indicated U.S. trade negotiators had offered to cancel new China tariffs and reduce existing levies on Chinese goods by up to 50% on $360 billion worth of imports.

“This has become a buy high, sell higher market, and today’s strength is related to a U.S.-China trade deal that seems to be coming together,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, told MarketWatch.

The Thursday trade optimism came after the Federal Reserve left interest rates unchanged on Wednesday while expressing optimism about U.S. economic health.

Similarly, on Thursday the European Central Bank decided to keep its main deposit rate at negative 0.5%, while maintaining its rate of asset purchases at €20 billion a month, as widely expected by analysts. The ECB meeting was the first presided over by new President Christine Lagarde.

“We’re in an easy money environment, thanks to Jerome Powell, Christine Lagarde and central bankers around the world,” said Yousef Abbasi, director of U.S. institutional equities and global market strategist at INTL FCStone, in an interview.

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In the U.S., “We’re not going to get any hikes in 2020 and at least for the first half of next year, the Fed is going to be buying assets hand over fist,” Abbasi added. The New York Federal Reserve said on Thursday it would step up the amount of funds it would inject into the multi trillion dollar repo market to help investors get through the end of year period, when banks are less willing to lend out their cash.

Meanwhile, the U.K. is holding a general election on Thursday which will play a crucial role in determining the course of its plans to exit from out of the European Union. Recent polling figures indicate Prime Minister Boris Johnson’s Conservative Party is most likely to win, but his lead has narrowed over the rival Labour Party, injecting some doubt into the outcome. Results are expected late Thursday New York time.

In U.S. economic data, new unemployment claims jumped by 49,000 to 252,000 during the week ended Dec. 7, the Labor Department said Thursday, the highest level since Sept. 2017, though the data was likely affected by the U.S. Thanksgiving holiday. Wholesale price inflation remained tame, with the producer-price index unchanged in November, with core producer prices, which strips out volatile energy and food prices, falling to a three-year low of 1.3%.

Which stocks are in focus?

Shares of General Electric Co. GE, +0.99% gained more than 4%Thursday, after UBS analyst Markus Mittermaier upgraded shares to the equivalent of “buy” from “hold” and raised his price target to $14 from $11.50, a premium over the stock’s $10.97 closing price Wednesday.

Starbucks Corp. SBUX, +1.51% stock rose nearly 2% after it was upgraded to overweight from neutral by J.P. Morgan, after a meeting with company management.

Delta Air Lines DAL, +2.65% said Thursday it expects to generate per-share earnings of $6.75 to $7.75 in 2020 as revenue grows 4% to 6%. Shares rose nearly 3% Thursday.

Southwest Airlines LUV, +0.65% said Thursday it has reached a settlement with Boeing BA, +6.83% , over the grounding of its 737 Max fleet totaling about $125 million and that it will share the money with its employees. The company’s stock rose 1.9%.

Lululemon Athletica LULU, -0.07% fell more than 5% after the apparel retailer reported an adjusted third-quarter profit below Wall Street expectations late Wednesday.

Disney + DIS, +1.23% has been downloaded 22 million times to mobile devices in what is probably the most successful launch in the nascent industry’s history, according to app-tracking firm Apptopia.Shares gained 0.3%.

Boeing BA, +6.83% fell after the Wall Street Journal reported the grounding of Boeing’s 737 MAX is set to stretch into next year.

Facebook FB, +2.12% fell nearly 3% after a report the FTC is considering seeking a preliminary injunction against Facebook over antitrust concerns related to how its products interact.

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How are other markets faring?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, 0.657% surged 10 basis points to 1.90% as investors monitored ECB and trade developments.

West Texas Intermediate crude CLF22, -0.30% on the New York Mercantile Exchange gained 64 cents, or 1.1%, to $59.40 a barrel, after a 0.7% decline on Wednesday.

February gold US:GCG20 on Comex fell $1.60, or 0.1%, to $1,473.40 an ounce, with the metal on track for a third gain in a row.

The U.S. dollar, as measured by the ICE U.S. Dollar Index DXY, +0.23% , was virtually unchanged at 97.44, against a basket of a half-dozen currency peers.

In Europe, the Stoxx 600 Europe index SXXP, -0.09% closed 1.36 point higher, 0.3%, at 407.58.

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