Stocks pare gains after US announces limited trade deal with China

The Dow Jones pared gains after the U.S. announced a limited trade deal with China, though the indicator still ended the session up more than 1 percent.

The Dow Jones Industrial Average closed at 26,817, up 320 points, or 1.2 percent, after peaking at a 27,010 when markets had been buoyed by hopes of a trade deal between the two countries.


Stocks pared some of the gains as the limited nature of the agreement became clear: the Dow scaled back about 200 points from the 500-point increase it had registered at that point.

President TrumpDonald John TrumpUPS, FedEx shut down calls to handle mail-in ballots, warn of 'significant' problems: report Controversial GOP Georgia candidate attempts to distance from QAnon Trump orders TikTok parent company to sell US assets within 90 days MORE said that he and Chinese Vice Premier Liu He had agreed to principles for a deal that would cancel a tariff increase scheduled for Tuesday, lead to $40 billion to $50 billion of Chinese agricultural purchases, and tackle some intellectual property issues.

But the deal still needs to be approved by Chinese President Xi Jinping, and would only be written and signed in the coming weeks, throwing some uncertainty into the mix.

It also fell well short of a comprehensive deal that would end the trade war, which has seen Trump imposing tariffs on $360 billion of Chinese imports and China retaliating with tariffs of their own, particularly targeting U.S. agriculture.

Trump said negotiations would continue on "phase two" of an agreement after the first deal was signed.