The S&P 500 was on track to hit a record on Monday, as optimism surrounding trade talks between China and the United States lifted consumer and technology stocks.
The stock index rose 0.6 percent to 3,040 in early trading, eclipsing the previous closing high of 3,025.86 notched on July 26.
The index was lifted, in part, after telecom giant AT&T reported slightly better than expected third-quarter profit before the start of trading and signaled a strong earnings outlook for 2020. The company’s shares rose as much as 5 percent.
Consumer discretionary stocks also climbed, after luxury retailer Tiffany received a takeover offer from France’s LVMH. Tiffany’s shares jumped more than 25 percent.
And comments from President Trump gave the broad market a lift, after he suggested that trade talks with China were going better than expected.
“We are looking probably to be ahead of schedule to sign a very big portion of the China deal, we’ll call it Phase One but it’s a very big portion,” he told reporters. The outlines of the deal Mr. Trump was referring to were agreed upon earlier in October, and would provide relief to American farmers and businesses that have been battered by the trade war.
Some retailers that import large shares of their products from China rose. Best Buy, which has seen its share price rise and fall along with sentiment on trade over the last year, jumped more than 1.5 percent, shortly after 11 a.m.
The technology sector also climbed, led by Microsoft. The tech giant won a $10 billion Department of Defense contract on Friday, beating out Amazon in a closely watched and politically charged battle.
Yields on government bonds — considered a gauge of outlook for growth and inflation among investors — rose. The yield on the 10-year Treasury note climbed to over 1.80 percent in early trading in New York. Earlier this month, that figure hovered around 1.50 percent, suggesting that investors were pricing in a not-insignificant chance of a recession.
The tenor of the markets has changed since the United States agreed not to impose new tariffs this month as part of an interim deal providing a respite in the ongoing trade and economic battle between Washington and Beijing.
Stocks have climbed for three straight weeks, including a 1.2 percent gain last week. The recent rally has continued the year’s pattern, in which investor sentiment has regularly swung from rising jitters about the damaging economic impact of a trade war to relief after a temporary détente is announced.
Federal Reserve interest rate cuts aimed at forestalling a potential slowdown have also regularly lifted shares beaten down by the trade war. The central bank will meet later this week and is expected to cut interest rates for a third time since July.
Despite the volatility, investors continue to sit on impressive gains. The S&P 500 is up about 21 percent this year. If stocks were to hold that level through the end of the year it would be the best annual performance for the index since 2013.