In the week ending Jan. 17, the Dow advanced 1.82 percent, the S&P 500 rose 1.97 percent and the Nadaq climbed 2.29 percent.
For the week, all three benchmark indexes posted their largest percentage gains since Aug. 30 last year, according to Dow Jones Market Data.
Trade optimism was among the major stimuli to the market.
China and the United States formally signed their phase-one economic and trade agreement in Washington on Wednesday. The equities market moved positively on the news, with the Dow closing above the 29,000 mark for the first time on Wednesday.
"After the first phase of the trade deal has been agreed upon investors have breathed a collective sigh of relief," David Bartosiak, market strategist at Zacks Investment Research said in a note.
Trade issues have been a big part of market anxieties since 2018 and the U.S. equities experienced a tumultuous summer in 2019 full of huge rips and terrifying dips as the tariffs and surrounding uncertainty weighed on stocks.
"The big takeaway from Wednesday's signing of the phase one trade agreement between China and the United States is that forward progress is being made to deescalate the trade tensions," Mark Otto, a senior trader on the New York Stock Exchange and Global Market Commentator at GTS, told Xinhua.
In the absence of trade dispute related news or geopolitical tensions with Iran, the markets will turn back to fundamentals including macroeconomic data and S&P 500 earnings, he added.
The fourth-quarter corporate earnings season kicked off this week, with low expectations for profit growth. Earnings are expected to decline by 0.6 percent for the S&P 500, Refinitiv estimated.
Big banks were among the early bunch of companies that released quarterly earnings. Both Goldman Sachs and Bank of America posted mixed results on Wednesday, while J.P. Morgan Chase and Citigroup reported better-than-anticipated earnings on Tuesday. Morgan Stanley jumped 6.6 percent on Thursday on the back of its better-than-expected quarterly results.
More than 8 percent of the S&P 500 has reported quarterly results thus far, according to FactSet data. Of those companies, 72 percent have posted better-than-expected profits.
On the data front, U.S. privately-owned housing starts jumped 16.9 percent to a seasonally adjusted annual rate of 1.608 million units in December, the Department of Commerce reported Friday. Economists polled by Reuters forecast housing starts would increase to a pace of 1.375 million units in December.
In the week ending Jan. 11, U.S. initial jobless claims, a rough way to measure layoffs, came in at 204,000, a decrease of 10,000 from the previous week's unrevised level, the Labor Department said on Thursday. Economists polled by MarketWatch predicted a 220,000 reading.
Advance estimates of U.S. retail sales increased by 0.3 percent in December, according to the Department of Commerce on Thursday.
U.S. consumer price index (CPI) rose 0.2 percent in December on a seasonally adjusted basis after rising 0.3 percent in November, the U.S. Bureau of Labor Statistics reported Tuesday. Economists polled by MarketWatch had forecast a 0.3-percent advance. The so-called core CPI which strips out food and energy edged up 0.1 percent in December.
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