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The S&P 500 has hit a record high, lifted by Wall Street’s expectations that the Federal Reserve will cut interest rates as soon as next month to keep the US-China trade war from stalling economic growth.

All 11 S&P 500 sector indexes logged gains for the session on Thursday after the US central bank left rates unchanged at the end of its two-day policy meeting on Wednesday, but pledged to “act as appropriate” to sustain economic health.

Wall Street’s main indexes have gained in recent weeks on expectations of a rate cut and hopes of a revival of trade talks between the US and China at the Group of 20 meeting next week in Japan.

The benchmark S&P 500 index, which has risen about seven per cent so far in June, closed above its previous record high close on May 3.

Craig Erlam, senior market analyst at OANDA in London, said it was always going to be difficult for the Fed to live up to high market expectations.

“While the bar was set high, policymakers appear to have cleared it with ease while also leaving themselves with plenty of outs,” he said.

A more-than-expected dovish Fed led to US Treasury bond yields tumbling, with the benchmark 10-year yields dropping below two per cent for the first time in more than two-and-a-half years.

The energy index jumped 2.21 per cent, the most among the 11 major S&P sectors, as oil prices surged over five per cent on renewed tensions in the Middle East after Iran shot down a US military drone.

Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma, cautioned that the new high on the S&P 500 could be “fool’s gold”.

“We have this simmering tension in Iran that could spill over and create all kinds of global fears,” he said.

The Dow Jones Industrial Average climbed 0.94 per cent to end at 26,753.17 points, while the S&P 500 gained 0.95 per cent to 2954.18.

The Nasdaq Composite added 0.8 per cent to finish at 8051.34.

Apple rose 0.8 per cent and briefly hit $US200 a share for the first time since early May.

The iPhone maker is viewed as a major potential casualty in Trump’s trade war, should it worsen.

Shares of Slack Technologies, the fast-growing workplace messaging platform, soared almost 50 per cent in their public trading debut, valuing the company at more than $US25 billion.

The technology sector rose 1.43 per cent, with Oracle leading the charge. Its shares jumped 8.2 per cent after the business software maker forecast current-quarter profit above estimates. Its gain fuelled the S&P 500 more than any other stock.

Cruise operator Carnival slid 7.6 per cent, the most among S&P companies, after cutting its profit forecast for the year on the Trump administration’s sudden ban on cruises to Cuba and weakening demand in Europe over political uncertainty.

Rivals Royal Caribbean Cruises and Norwegian Cruise Line dropped over two per cent each.

Buoying sentiment was data that showed the number of Americans filing applications for unemployment benefits fell more than expected last week, pointing to underlying labour market strength despite a sharp slowdown in job growth in May.

Volume on US exchanges was 7.5 billion shares, compared with the 6.9 billion-share average for the full session over the last 20 trading days.

Advancing issues outnumbered declining ones on the NYSE by a 3.14-to-1 ratio; on Nasdaq, a 1.44-to-1 ratio favoured advancers.

The S&P 500 posted 103 new 52-week highs and three new lows; the Nasdaq Composite recorded 127 new highs and 46 new lows.