The deal, which has been agreed to in principle and will take three to five weeks to write, includes China agreeing to raise its agricultural purchases to between $40 billion and $50 billion from $8 billion to $16 billion, in addition to making reforms on intellectual property and financial services. The U.S. will not be raising tariffs from 25 percent to 30 percent on Oct. 15. A decision has not yet been made on the tariff increase scheduled for Dec. 15.
A comprehensive trade deal will have two or three phases, according to Trump. China's trade team is calling the agreement a "pause" in the trade war, and not a deal.
The Dow Jones Industrial Average was up as much as 517 points in the moments following the announcement before finishing higher by 319 points, or 1.2 percent. The S&P 500 and Nasdaq closed up 1.1 percent and 1.3 percent respectively.
|I:DJI||DOW JONES AVERAGES||34382.13||+360.68||+1.06%|
|I:COMP||NASDAQ COMPOSITE INDEX||13429.978403||+304.99||+2.32%|
The October reading of the University of Michigan Consumer Sentiment released Friday morning hit a three-month high of 96, up from 93.2 the prior month.
In stock news, trade-sensitive names were charging higher.
|DE||DEERE & CO.||383.76||+5.51||+1.46%|
|AMD||ADVANCED MICRO DEVICES, INC.||74.59||+1.50||+2.05%|
General Motors shares gained after the automaker provided fresh details on negotiations with the United Auto Workers union. GM, in a letter, outlined some revised points on its offer to the union.
Investors are also eyeing Apple, which hit an all-time high after a Wall Street analyst raised his price target. Wendy's also saw a nice pop after disclosing that sales in the third-quarter were stronger than expected.
|GM||GENERAL MOTORS CO.||55.93||+1.57||+2.89%|
In commodities, soybeans were trading at their highest level since the start of the trade war. The legume was trading up 1.46 percent at $9.37 a barrel. Oil prices spiked 2.3 percent after a rocket attack on an Iranian tanker. Global investors are also expecting to hear from Saudi oil giant Aramco as it prepares for its initial public offering. Early reports indicate the company's valuation may around $1.5 trillion, slightly below the $2 trillion Crown Prince Mohammed bin Salman was aiming for.
In Europe, London's FTSE gained 0.3 percent, Germany's DAX added 1.9 percent and France CAC was higher by 1.2 percent.
In Asia, China's Shanghai Composite finished higher by 0.9 percent on Friday and 2.4 percent for the week. Tokyo's Nikkei closed up 1.2 percent and 1.8 percent for the week. Hong Kong's Hang Seng ended the session higher 2.3 percent and 1.9 percent for the week.
FOX Business' Ken Martin and The Associated Press contributed to this report.