By Anna Isaac and Karen Langley
Stocks climbed Thursday after the European Central Bank unveiled a sweeping stimulus package and trade tensions between the U.S. and China showed signs of easing.
The Dow Jones Industrial Average rose 108 points, or 0.4%, on track to extend its winning streak to seven sessions, while the S&P 500 increased 0.4%. Both indexes are within 1% of July's all-time highs. The technology-heavy Nasdaq Composite rose 0.5%.
Investors have been preoccupied in recent weeks with signs of slowing global growth and uncertainty over the long-simmering trade war with China. The Federal Reserve is expected to follow the ECB next week in cutting interest rates to cushion the economy from a global slowdown.
Recent gains show the market is focusing on the healthy fundamentals of the U.S. economy, said Sandip Bhagat, chief investment officer at Whittier Trust, who said he has been overweight stocks over the past two years, meaning he holds a larger position than the benchmark the firm tracks.
"The consumer is healthy, confidence is high, incomes are rising and that's the main reason to be optimistic about the U.S. economy and therefore the U.S. stock market," Mr. Bhagat said.
With trade talks due to be held in Washington next month between the U.S. and China, President Trump postponed new tariffs on $250 billion in goods that were due to take effect on Oct. 1 by two weeks, a conciliatory gesture that could point to easing tensions.
In Europe, the ECB cut its key deposit rate and said it would begin EUR20 billion ($22.04 billion) a month of asset purchases, an action commonly known as quantitative easing, starting Nov. 1.
The level of asset purchases was lower than some had hoped. But Hugh Gimber, global market strategist at J.P. Morgan Asset Management, said it might cheer markets if outgoing ECB President Mario Draghi is seen as leaving space for further action by his successor, Christine Lagarde.
Mr. Draghi said it was "high time for fiscal policy to take charge," suggesting that looser monetary policy was limited in terms of boosting the economic bloc.
Investors waiting for action by the Federal Reserve parsed inflation data that was broadly in line with expectations. Core consumer prices, which exclude the volatile categories of food and energy, increased 0.3% for a third consecutive month.
Meanwhile, the number of weekly U.S. jobless claims fell more than expected in the latest week. The number of claims fell by 15,000 to 204,000, below the 215,000 predicted by a Wall Street Journal survey of economists.
The recent developments in monetary policy, trade negotiations and economic data "are positives and put stocks kind of where they should be based on valuations," said Oliver Pursche, chief market strategist at Bruderman Asset Management.
Stocks in Asia got a boost on the tariff delay. The Shanghai Composite and Japan's Nikkei both closed up 0.8%. Hong Kong's Hang Seng was an outlier, slipping 0.3%.
The offshore yuan was up 0.6% against the U.S. dollar. The yuan's relative weakness has been a source of tension between the countries in recent weeks, with the U.S. accusing China of currency manipulation after a sharp depreciation in the yuan.
The yield on the benchmark 10-year U.S. Treasury note rose to 1.772%, from 1.733% Wednesday. Bond prices fall as yields rise.
Write to Anna Isaac at email@example.com