USA stocks closed at record highs as investors assessed the details of the partial trade deal with China.
The yield on two-year Treasuries declined less than one basis point to 1.57 per cent, the lowest in a week. (BAC) and Wells Fargo & Co.
In discussing the trade deal, President Donald Trump said the US and China were "righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families". He also said the deal has "total and full enforceability".
To be sure, the deal does not remove existing USA tariffs on Chinese imports and leaves questions as to how the terms of the agreement will be enforced.
But investors are concerned that the trade deal with China will keep tariffs in place on almost two-thirds of Chinese goods at least until the presidential election in November.
Beijing also agreed to enforce intellectual property regulations, and back a "bilateral evaluation and dispute resolution arrangement" that would see the two countries work in partnership to deal with disputes over copyright, intellectual property and patents. A host of other hard issues have been postponed to the next round of trade negotiations.
"It's anti-climatic", said Jim Paulsen, chief investment strategist at the Leuthold Group. "If it's improving, then by definition it's not deteriorating and that's a good thing".
The trade agreement clears the way for investors to focus on upcoming quarterly earnings reports, including the outlooks companies provide in light of the deal.
Elsewhere, a closely-followed gauge of factory sector conditions in the jurisdiction of the Federal Reserve Bank of NY continued to outperform national manufacturing sector gauges like that from the Institute for Supply Management.
Also lifting sentiment were comments made by White House economic advisor Larry Kudlow that the Trump administration would unveil more tax cuts later in the year.
Russia's state news agency Tass reported that its government has resigned.
Overseas, the pan-continental Stoxx Europe 600 index inched up less than 0.1%. Economists had expected a 0.2% increase. Target said its same-store sales during the holidays rose just 1.4%, compared to growth of 5.7% from the prior year.
Mark Haefele, global chief investment officer at UBS GWM, is optimistic about the earnings season.
In other US corporate news, Target (-6.5%) is among the biggest early laggards after reporting December holiday sales that were below expectations.
Stocks in Asia looked set for modest gains as investors parsed details of the U.S. China's Shanghai Composite dropped 0.54%, while Hong Kong's Hang Seng fell 0.39%, and Japan's Nikkei-225 tumbled 0.45%.
Benchmark crude oil fell 42 cents to settle at $57.81 a barrel. The Russell 2000 picked up 0.4%, to 1,682.40.
The yield on the 10-year Treasury dropped 1.65% to 1.788% while yield on the 30-year Treasury fell 1.45% to 2.242%.