U.S. stocks closed higher Thursday, driven by strong gains in megacap tech companies as investors parsed mixed signals on global trade policy from the White House and Beijing.

The Nasdaq Composite climbed 2.74%, while the S&P 500 added 2.03%. The Dow Jones Industrial Average lagged behind but still gained 1.23%, held back by a 6% drop in IBM shares after the company cited lost government contracts due to budget cuts.

Shares of Nvidia, Meta, Amazon, Tesla, and Microsoft all rose, lifting the broader market and pushing the tech sector higher for a third consecutive day.

China talks continue 

The rally came despite China’s commerce ministry denying any current trade talks with the U.S. and demanding the removal of all existing tariffs. 

Meanwhile, President Trump appeared to soften his tone, with Treasury Secretary Scott Bessent hinting at a potential agreement with South Korea next week.

Baird analyst Ross Mayfield expressed skepticism about the sustainability of the rally.

“China was pretty explicit there are no negotiations ongoing,” he told CNBC. “The market may still be reacting to signals that the administration wants a deal.”

Despite the optimism, investors remain cautious. The S&P 500 is still down 3.5% since Trump’s April 2 tariff announcement, while the Dow has declined 5.3% and the Nasdaq 2.8% over the same period.

Looking ahead, markets are awaiting earnings from Alphabet, Google and Intel. While Alphabet is not expected to show immediate effects from trade tensions, analysts will be watching for any signs of future tariff-related impacts. Intel’s results will mark the debut of new CEO Lip-Bu Tan’s leadership.

Bitcoin (BTC) traded in the mid-$93,000 range for most of the day.