(CNN) - The Dow and broader stock market rallied again on Friday after US President Donald Trump said the United States and China reached a preliminary trade agreement.
Trump called the initial deal "substantial." He is meeting with Chinese Vice Premier Liu He Friday afternoon.
Trade has dominated markets once again this week, with stocks rising and falling in lockstep with headlines.
Negotiators of the two countries reached a preliminary agreement on Friday but fell short of a comprehensive trade deal, sources said. Details of the agreement are still emerging, but will likely include a halt on US tariff increases.
President Donald Trump said in a tweet earlier Friday that "good things are happening" at the trade meetings and that "all would like to see something significant happen."
In response, stocks are sharply higher across the board.
The Dow soared more than 500 points at its peak, with little time left in the trading day. The S&P 500 was up 1.5%, while the Nasdaq Composite traded 1.7% higher.
All three indexes are on track for a gain this week, which would be the first in three weeks for the Dow and the S&P 500.
But if anything has been learned throughout the US-China trade negotiations, it's that a tweet or a new headline can change the market's sentiment at the drop of a hat.
"Everyone is kind of narrowing in on this idea that we will get a smaller, partial deal — a phase one deal, if you will — and the worry about the trickier bits later," said Michael Arone, chief investment strategist at State Street Global Advisors.
"Investors always overreact and then they adjust relative to the details. That's what we're seeing here," Arone added.
Some economic data that could have derailed Friday's rally was University of Michigan consumer sentiment, which over the past months showed growing concerns about trade tensions.
But the survey-based index beat expectations, with the negative impact of trade policies weighing on consumers' minds a little less.
"Importantly, the impeachment inquiry has not had a significant negative impact on economic prospect," said Richard Curtin, chief economists of the survey of consumers.
Elsewhere in commodity markets, oil prices are sharply higher after an Iranian oil tanker was hit by two missiles in the Middle East. The missiles were possible fired from Saudi Arabian soil.
Geopolitical tensions in the oil-rich region pushed prices higher on Friday, but have come off their highs. US oil prices are up 2.4% at $54.81 a barrel, while the international benchmark, Brent crude, is up 2.6% at $60.62 a barrel.
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