The Nasdaq and S&P 500 closed at record highs Thursday after the U.S. and China agreed to a phase one trade deal. An announcement of the deal is imminent. The Dow Jones Industrial Average finished about 32 points from its record close.

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The major averages surged to session highs in early trading after President Trump on Thursday morning tweeted Washington and Beijing were "getting very close" to securing a big trade deal.

Stocks extended their gains after The Wall Street Journal reported the U.S. offered to cut tariffs in half on Chinese imports and cancel the new levies that are set to hit Chinese goods on Sunday.

Ticker Security Last Change Change % I:DJI DOW JONES AVERAGES 27173.96 +358.52 +1.34% SP500 S&P 500 3298.46 +51.87 +1.60% I:COMP NASDAQ COMPOSITE INDEX 10913.561787 +241.30 +2.26%

Trade sensitive names such as Caterpillar, Deere and Micron Technology were higher. Apple reversed early losses that developed after Credit Suisse put out a note suggesting iPhone shipments in China dropped sharply in November. Chinese tech stocks, like Baidu, also gained.

Ticker Security Last Change Change % CAT CATERPILLAR INC. 145.91 +0.77 +0.53% DE DEERE & COMPANY 219.25 +2.73 +1.26% MU MICRON TECHNOLOGY INC. 49.14 -0.33 -0.67% AAPL APPLE INC. 112.28 +4.06 +3.75% BIDU BAIDU INC. 123.79 +0.03 +0.02%

Meanwhile, Southwest shares gained after the airline reached a compensation agreement with Boeing for a portion of the projected financial damages related to the grounding of the 737 Max jet. Boeing shares were little changed.

General Electric climbed after new UBS analyst Markus Mittermaier assumed coverage with a "buy" rating and $14 price target, citing debt repayment and better free cash flow for his view.

Ticker Security Last Change Change % LUV SOUTHWEST AIRLINES CO. 37.10 +0.24 +0.65% BA BOEING COMPANY 156.03 +9.98 +6.83% GE GENERAL ELECTRIC COMPANY 6.11 +0.06 +0.99%

On the earnings front, Lululemon fell despite reporting better-than-expected third-quarter results and raising its forecast as traders instead focused on guidance falling short of Wall Street estimates.

Ticker Security Last Change Change % LULU LULULEMON ATHLETICA INC. 315.35 -0.23 -0.07%

Commodities were mixed with gold down fractionally at $1,473 an ounce and West Texas Intermediate crude oil up 0.9 percent at $59.30 a barrel.

U.S. Treasurys tumbled, running the yield on the 10-year note up 11 basis points to 1.90 percent.

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France's CAC and Germany's DAX rallied 0.4 percent and 0.6 percent, respectively, while Britain's FTSE gained 0.8 percent as citizens went to the polls to vote on the next prime minister.

In Asia on Thursday, Japan's Nikkei edged 0.1 percent higher, Hong Kong's Hang Seng was up 1.3 percent, while the Shanghai Composite was down 0.3 percent.

FOX Business' Ken Martin and The Associated Press contributed to this report.