On Thursday, President Donald Trump announced from the White House that "Washington and Beijing had signed a trade agreement," although the details of the pact have not yet been revealed. He added that a similar deal with India is expected soon.

David Lefkowitz, head of US equities at UBS Global Wealth Management, told CBS MoneyWatch that investors are anticipating an easing of trade and geopolitical tensions.

“We think the rally makes sense, considering that most large-cap companies should weather the tariffs well,” Lefkowitz said. “In fact, we think the upcoming second-quarter earnings season will once again demonstrate the resilience of corporate earnings.”

However, some analysts remain cautious. Vital Knowledge's Adam Crisafulli warned the same outlet that “there is a dangerous level of complacency surrounding the trade and tariffs story, a view reinforced by the fact that markets are celebrating a so-called 'deal' with China for the third time.”

While stocks celebrated the announcements, investors were also processing fresh inflation data. The Commerce Department reported that consumer prices rose 2.3% in May compared to the same month a year earlier. In April, the increase was 2.1%.

Core inflation, which excludes more volatile prices like food and energy, showed an annual increase of 2.7%, up from 2.5% the previous month. This data could influence the Federal Reserve's future monetary policy decisions.