US stock indexes have hit record highs, with the S&P 500 crossing the 3300 mark for the first time, as upbeat earnings from Morgan Stanley and a tech rally added to optimism from an initial US-China trade deal.

Morgan Stanley’s shares jumped 5.6 per cent after the Wall Street bank beat fourth-quarter profit estimates and raised its performance goals, wrapping up earnings of big US lenders on a strong note.

Technology stocks provided the biggest boost, with Apple up more than one per cent and chipmakers gaining after a strong forecast from the world’s top contract chipmaker TSMC signalled a recovery in the sector.

The Philadelphia Semiconductor index climbed 1.3 per cent on Thursday.

Global stock markets scaled new highs after Washington and Beijing on Wednesday signed a deal that paused an 18-month tariff war that had bruised financial markets and crimped global growth.

China is expected to boost purchases of US goods and services in exchange for the rolling back of some tariffs as part of the deal, but concerns remain with several thorny issues still unresolved.

Strategic Board Solutions LLC founder Peter Kenny said the “phase one” trade deal with China had been largely priced into markets.

“Any movement forward from here, at least in the near term, is going to be driven by earnings. So far, we do see a sort of a positive tone set by the financials,” he said.

Analysts expect earnings at S&P 500 companies to have dropped 0.5 per cent in the fourth quarter, according to Refinitiv IBES data, the second consecutive decline.

At 9.53am local time, the Dow Jones Industrial Average was up 0.49 per cent at 29,173.11. The S&P 500 rose 0.46 per cent to 3304.56 and the Nasdaq Composite gained 0.70 per cent to 9323.93.

Data from the Commerce Department showed US retail sales rose 0.3 per cent in December, in line with economists’ expectations.

The numbers follow disappointing holiday sales reports from retailers including Target and JC Penney that had raised concerns about the sector’s health.

Signet Jewelers jumped 33.8 per cent after raising its 2020 adjusted earnings estimate on the back of upbeat holiday sales.Set featured image

Bank of New York Mellon slid to the bottom of the S&P 500, down 7.2 per cent, after the custodian bank missed estimates for quarterly profit.

Advancing issues outnumbered decliners by a 3.48-to-1 ratio on the NYSE and a 3.55-to-1 ratio on the Nasdaq.

The S&P index recorded 67 new 52-week highs and no new low, while the Nasdaq recorded 131 new highs and one new low.