US stock markets hit fresh all-time highs today as investors optimistically await the signing of “phase one” of the US-China trade deal.
Indices were also boosted by expectations of a pick-up in profits for US companies as fourth-quarter earnings season kicks off.
The tech-heavy Nasdaq was the biggest riser, adding one per cent by close of play. The S&P 500 rose 0.3 per cent, while the Dow Jones industrial average climbed 0.3 per cent.
Tech giants Apple, Facebook, Netflix and Microsoft drove US markets upwards.
Google’s owner Alphabet rose 0.7 per cent and only narrowly missed crossing the vaunted $1 trillion (£777bn) market capitalisation threshold. Only Apple, Microsoft, Amazon and Saudi Aramco have reached this valuation before.
The US and China are due to sign a “phase one” trade deal on Wednesday, which will reduce tensions between the world’s two-biggest economies, but not end them.
Reports that the administration of President Donald Trump is planning to withdraw its official accusation that China is a currency manipulator also boosted markets yesterday, with investors seeing the move as a sign of thawing relations.
A cooling of tensions in the Middle East also sent investors back towards riskier assets.
Europe largely missed out on the US’s gains, except for the FTSE 100, which rose 0.4 per cent. Britain’s blue-chip index was lifted by a fall in sterling.
Some analysts cautioned that markets could be disappointed by the exact details of the US-China deal.
“While markets are clearly reacting with optimism over this phase one deal, it is important to take into account the possibility that this deal could underwhelm when we finally see the finer details,” said Joshua Mahony, senior market analyst at online trading platform IG.