Dow, S&P 500 trade at records as stock market rallies broadly

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U.S. stocks rallied Thursday, with both the Dow Jones Industrial Average and the S&P 500 climbing to records, following strong economic data, which helped alleviate concerns over escalating U.S.-China trade tensions.

Where are the major benchmarks trading?

The Dow

DJIA, +0.90%

gained 249 points, or 1%, to 26,656, hitting an all-time high for the first time since January. All but one of the Dow’s 30 components were in positive territory.

The S&P

SPX, +0.75%

 advanced 21 points, or 0.8%, to 2,929, notching its first record since late August.

The Nasdaq Composite Index

COMP, +1.00%

 rose 72 points, or 0.9%, to 8,022. The tech-heavy index is 1.7% below its record.

Read: How recent trading on Wall Street has been lacking in volatility

What’s driving markets?

Recent market gains have come on signs of steadily improving fundamentals. In the latest economic data, first-time jobless claims fell by 3,000 last week, dropping to their lowest level since November 1969. Separately, the Philadelphia Fed manufacturing index jumped more than expected in September, rising to 22.9 from 11.9 in the previous month.

Existing-home sales ran at a seasonally adjusted annual 5.34 million rate in August, unchanged compared with July. The nine-year-old U.S. expansion is poised for 3% growth in the second half of 2018, according to an index that measures the nation’s economic health.

Such reports have helped to offset some of the adverse impact of uncertainty surrounding trade policy.

Among recent developments, President Donald Trump earlier this week reiterated his hard-line stance on China and said the U.S. had “no choice” but to levy another $267 billion in duties on China. That would come on top of announced tariffs on about $200 billion in Chinese goods announced late Monday. China responded with tariffs of 5% to 10% on $60 billion worth of U.S. products that will take effect Sept. 24, and said it may introduce more measures if the U.S. goes ahead with higher tariffs.

While many are concerned that a full-blown trade war will become a huge headwind to global economic growth, investors have repeatedly shrugged off the issue over the past several months, choosing instead to focus on the strong economy.

Separately, many prominent Wall Street players have played down the impact that the trade issue is having on the economy. Jamie Dimon, the chief executive officer of JPMorgan Chase & Co.

JPM, +1.00%

said the U.S. wasn’t in a trade war, but “a trade skirmish” of less severity.

Trump on Thursday also tweeted over his displeasure with the Organization of the Petroleum Exporting Countries, or OPEC, over rising oil prices.

Read: Trump blasts OPEC on oil prices, says cartel ‘must get prices down now!’

What are market analysts saying?

“Fundamentally and technically, the market is really strong right now. Corporate earnings have been good, and economic data has been really good. At the same time, there’s a sense that China’s most recent trade retaliation wasn’t as severe as expected, which led to some optimism and relief that the situation may not turn into a full-blown trade war,” said Paul Brigandi, managing director and head of trading for Direxion.

“The tariff situation isn’t going away, and it will need to be resolved, but until threats become official policy, the market can ignore it,” he said. “Certainly, what we’ve seen so far hasn’t been able to knock the momentum out of the market.”

What stocks are in focus?

Shares of Canadian cannabis company Tilray Inc.

TLRY, -19.70%

 fell 15% following an extremely volatile patch of trading, which resulted in it being halted five times in less than an hour on Wednesday. The stock has jumped nearly 600% over the course of the past month, making it one of the most high-profile bets in the legal cannabis space.

Shares of Red Hat Inc.

RHT, -7.04%

 slumped 6.6% a day after it reported revenue that was below expectations and gave an outlook that was below the analyst consensus.

Darden Restaurants Inc.

DRI, -2.14%

 dropped 0.9% after the company beat fiscal first-quarter profit and sales expectations and raised its full-year outlook.

Shares of Galectin Therapeutics Inc.

GALT, +5.12%

 jumped 4.1% after the company commented on a cancer combination drug trial.

Skechers USA Inc.

SKX, -4.60%

 fell 3.8% after Cowen downgraded the stock, citing its growing inventory and foreign-exchange pressures.

U.S.-listed shares of Rio Tinto

RIO, +3.71%

 rose 3.3% after the mining giant unveiled plans to buy back a swath of its Australia-listed shares before the end of the year as part of its move to return about $3.2 billion in proceeds from the sale of coal assets to its shareholders.

Micron Technology Inc.

MU, +3.00%

 rose 2.9%. The chip maker is scheduled to report its quarterly results after the market closes.

Read: Micron earnings preview

Where are other markets trading?

Asian stocks mostly rose as investors shrugged off trade tensions. Japan’s Nikkei rose for a fifth straight session and European markets gained across the board.

Crude-oil prices

CLK9, -0.32%

 turned lower following Trump’s OPEC tweet while the price of gold

GCM9, +0.34%

was mostly flat. The U.S. dollar index

DXY, -0.63%

 extended losses.

Providing critical information for the U.S. trading day. Subscribe to MarketWatch’s free Need to Know newsletter. Sign up here.

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