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US stocks surge on US-China trade deal optimism

Trader Sal Suarino works on the floor of

Trader Sal Suarino works on the floor of the NYSE on Friday. Photo Credit: AP / Richard Drew

U.S. stocks finished broadly higher Tuesday as investors grew more optimistic about the prospects for a resolution to the costly trade dispute between the U.S. and China.

Technology, financial and health care stocks powered much of the rally, which gave the benchmark S&P 500 index its biggest gain this month and a three-day winning streak. The wave of buying also drove a 372-point gain for the Dow Jones Industrial Average, ending its four-day run of losses.

President Donald Trump said Tuesday that he might let a March 2 deadline slide in trade talks with China if the two countries get close to a deal.

Both nations are trying to reach a deal before March 1. That's when additional tariffs will kick in, escalating the conflict and further hurting companies and consumers with higher prices on materials and products.

"Any deal would help alleviate some of the uncertainty," said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. "The GDP hasn't been dinged that much from the trade tariffs, it's really been the uncertainty. It's spilling over into business plans and that's a hurdle for growth."

Stocks got an early boost Tuesday after lawmakers in Washington reached a tentative deal to avoid another partial government shutdown. The agreement on border security involves far less money for a wall than the White House wanted, and it's not clear whether Trump will support the deal.

The S&P 500 index rose 1.3 percent to 2,744.73. The Dow climbed 372.65 points, or 1.5 percent, to 25,425.76. The index was briefly up by 405 points. The Nasdaq composite rose 1.5 percent to 7,414.62.

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