Stocks rally to close at record high

The S&P 500 closed nearly 1% higher on Thursday, topping the previous closing record set back in April, while the Dow Jones Industrial Average rose 250 points and the Nasdaq ended 0.80% higher. Bond yields hit multi-year lows as more investors piled into U.S. treasuries.

Why it matters: As far as equities are concerned, the prospect that the Federal Reserve may cut interest rates outweighs any fears about the escalating trade tensions that spooked markets in recent weeks. The bond market, however, is signaling more concern that a Fed cut could indicate problems ahead for the U.S. economy.