Analysts speculated it could be a buy-the-rumor, sell-the-news trade. The S&P 500 was hardly changed late morning, down 0.04%.

Under the trade deal, to be signed on Wednesday in Washington, China has pledged to buy almost $80 billion of additional manufactured goods from the United States over the next two years while China would buy over $50 billion more in energy supplies.

GEORGE GERO, MANAGING DIRECTOR AT RBC WEALTH MANAGEMENT

“Basically, this is called ‘sell on the news.’ The same news has been digested many times over and the devil is now in the details, in other words, how much more is being bought, how much more is being imported and exported.”

SEBASTIAN GALY, SENIOR MACRO STRATEGIST, NORDEA

“Given that this is a mostly bullish market, it will likely ignore any negative news for now. People will eventually start focusing on the next leg, which is negotiations with the Europeans, which could hurt those markets going forward.”

JIM CARNEY, FOUNDER AND CEO, PARPLUS PARTNERS, NEW YORK

“Even though it’s probably a pretty weak deal that we’re signing, it’s better than nothing. But people are just tired of all the extreme rhetoric. I think it’s priced in that the rhetoric will be toned down. I don’t think it has too much to do with the actual deal, it’s more to do with the rhetoric on both sides. Last year when we started the New Year, there was extreme pessimism. Now people are risk averse, but there isn’t extreme bearishness. The market is fully valued.”

Regarding the details on China’s commitment to purchases of U.S. goods:

“I don’t think any of that really matters. The only thing that could have had a material effect is if they came to some agreement on intellectual property.”

PETER TUZ, PRESIDENT OF CHASE INVESTMENT COUNSEL IN CHARLOTTESVILLE, VIRGINIA

"Incrementally positive.”

“The fact that the China thing is not getting worse and we have an agreement is lessening one of the things that could go wrong in 2020.”

“We are not up today...so I think it is largely priced into the market. Frankly, I was worried more about what happens if it went the other way again, but I guess you don’t pick a date to sign something if you don’t think that’s going to happen.”

“What I don’t think is priced into the market, and this will take a quarter or two to work itself out, is a lot of companies whose calls I listened to after the end of the third quarter cited reduced spending by corporations on all sorts of products, tech mostly. Reduced spending or delayed spending based on fears of a global slowdown largely caused by the tariff issues…

“Hopefully you will see more spending on the part of corporations in the first and second quarters as a result of the tensions easing a bit, but that will take time to play out.”

MARK MCCORMICK, NORTH AMERICAN HEAD OF FX STRATEGY, TD SECURITIES, TORONTO:

“It doesn’t address the structural issues, but at least for markets it reduces some of the stress and some of the anxiety and uncertainty that plagued the markets throughout 2019. I think it gives the market a bit of breathing space right now which reinvigorates the euro carry trade that at the same time is helping dollar/yen push a little higher.”

“We’re kind of moving back into the data looks ok, trade wars are starting to subside, foreign policy is obviously an issue that can drive markets in 2020, but it’s not a big macro issue like tariffs and trade tensions, those things are big over sweeping macro issues…. I think markets know how to navigate around foreign policy issues, you have to wait and see what happens and kind of go with the flow, but it’s not as negative a global shock as the trade wars.”

Removing China’s designation as a currency manipulator….

“The market implications aren’t huge, it just shows you that the politics around trade and policy are intertwined and when the desired outcome is achieved some of the rhetoric falls back a little bit.”

JIM PAULSEN, CHIEF INVESTMENT STRATEGIST, LEUTHOLD GROUP, MINNEAPOLIS

“This is certainly a step in the right direction mostly because it pushes China off ‘doing nothing’ for the first time. Once they actually back up rhetoric with action, further progress could perhaps be made on both sides as these negotiations continue probably in perpetuity.

“However, I find a radical shift in Chinese spending unlikely. I have low expectations for meeting stated goals. But I do think the whole negotiation has moved the football forward for both the U.S. and China."

“I think market and company reactions to this deal, even if it works out imperfectly and ultimately with a smaller magnitude or a slower actual adjustment to stated goals, will still be largely positive. Just having China and the U.S. talking and changing behaviours will likely be perceived as a huge step toward a greater future and more successful working relationship.”

MICHAEL PURVES, CEO, TALLBACKEN CAPITAL, NEW YORK

"The market has had the January 15 date in (focus) for a long time, so if anything it might be a classic 'sell-the-news' event unless they have some surprises in there. Markets understand that this trade negotiation is going to unfold over a long period. Getting Phase One done is important but it is one step out of many."

NICK COLAS, CO-FOUNDER OF DATATREK RESEARCH, NEW YORK:

"The market is breathing a sigh of relief that this relationship is getting back on track. It is helpful to market psychology. Now you're trading on the hope that this makes for a better macro environment globally."

(Reporting by Lewis Krauskopf, April Joyner, Karen Brettell, Herb Lash, Ira Compliled by Alden Bentley)