The U.S. and China revealed they have reached an initial deal in their long-running trade war. The “Phase 1” agreement means that the U.S. won’t impose new tariffs on Chinese goods that had been set to kick in this weekend. Investors’ anxiety over the prospects of such an escalation in the trade war contributed to a sluggish start for the market this month.

President Donald Trump and Chinese officials made separate statements confirming the agreement Friday. Media reports signaling that a deal was close spurred a rally a day earlier that sent the S&P 500 and the Nasdaq to record highs. That likely led to the muted reaction in the markets Friday.

“People obviously were excited about what they heard yesterday and now what you’re seeing is a consolidation now that it’s actually been confirmed,” said Lisa Erickson, head of the traditional investment group at U.S. Bank Wealth Management.

Technology companies, which rely heavily on China for sales as well as parts, led the gainers Friday, outweighing losses in banks, energy stocks and elsewhere. Bond prices rose, pulling yields lower.

The S&P 500 index added a mere 0.23 points, or less than 0.1%, to reach an all-time high of 3,168.80.

The Dow Jones Industrial Average inched up 3.33 points, or less than 0.1%, to 28,135.38.

The Nasdaq, which is heavily weighted with technology stocks, rose 17.56 points, or 0.2%, to 8,734.88.

The Russell 2000 index of smaller company stocks fell 6.84 points, or 0.4%, to 1,637.98.

Optimism over the possibility of a trade deal helped stocks rebound after a downbeat start to the week. The S&P 500 ended the week with its third straight weekly gain. With less than three weeks left in 2019, the benchmark index is up 26.4% for the year.

The stock indexes were little changed through most of Friday as investors weighed the implications of the trade deal.

The costly trade conflict and the threat it could escalate at any moment has been the biggest source of uncertainty for Wall Street this year. The dispute has also hurt manufacturing around the world and caused U.S. businesses to hold back on making investments. The saving grace for the economy has been a strong job market and consumer spending.

Word that Washington and Beijing were pursuing a limited deal helped allay some of those concerns this fall, which helped spur the market higher after a sharp pullback this summer. But investors grew anxious earlier this month as the Dec. 15 planned rollout of U.S. tariffs on $160 billion worth of Chinese imports neared.

In addition to canceling the new tariffs, the U.S. also agreed to reduce certain existing import taxes on about $112 billion in Chinese goods from 15% to 7.5%. In return, Trump said on Twitter, the Chinese have agreed to “massive” purchases of American farm and manufactured products as part of the initial deal.

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