U.S. stocks advanced to close at new all-time highs Tuesday, as investors focused on U.S.-China trade talks and an upbeat assessment of the economy from Federal Reserve Chairman Jerome Powell.

How did major indexes fare?

The Dow Jones Industrial Average DJIA, +0.15% rose 55.21 points, or 0.2% to 28,121.68, while the S&P 500 index SPX, +0.42%  rose 6.88 points, or 0.2% to 3,140.52 The Nasdaq Composite Index  COMP, +0.66% gained 15.44 points, or 0.2%, to close at 8,647.93. Volumes were expected to remain subdued ahead of Thursday’s Thanksgiving Day holiday, which will see U.S. markets closed, followed by an abbreviated trading session on Friday.

Read: When do markets close for Thanksgiving?

Tuesday’s action marked the 10th record close of the month for all three major indexes.

See: Beware stock-market ‘FOMO’ as Wall Street churns out records, says long-term bull

What drove the market?

Stocks have been sensitive to developments in the long-running U.S.-China trade battle and have been largely in rally mode since October, after Washington and Beijing signaled they were working toward a partial deal aimed at resolving less controversial issues. Still ahead is an important Dec. 15 deadline, when a new round of U.S. tariffs on Chinese imports are due to take effect.

Top Chinese and U.S. negotiators agreed on talks toward a preliminary “phase one” deal, China’s Commerce Ministry said Tuesday. The ministry said Vice Premier Liu He, the country’s top negotiator, spoke by phone with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, a conversation the official Xinhua News Agency described as focused on “solving issues regarding each other’s core concerns…”

During an Oval Office event Tuesday, U.S. President Donald Trump said that Washington was in the “final throes” in its efforts to reach a trade deal with China, but also underscored that Americans stand with pro-democracy protesters in Hong Kong.

Need to Know: These stocks and ETFs will help investors survive a ‘not great’ year, says top Wall Street strategist

“With global central banks pumping liquidity into the system and investors sensing that a trade deal is coming, that could create more upside,” Yousef Abbasi, director of U.S. institutional equities at INTL FCStone, told MarketWatch. “The market is telling us that the status quo is fine — we can live with no deal in 2019 as long as we don’t see any new tariffs and the rhetoric stays on the friendly side.”

Abbasi also said that equity markets’ upward trajectory could be sustained by calendar effects, during a holiday week and heading into the final month of the year. “As you start to get to the period of light volumes and lighter news flow, what tends to happen is that as long as systematically markets are working, they’ll keep up the trend they’ve been on.”

Meanwhile, Fed Chair Powell, in remarks Monday evening, outlined an optimistic view of the U.S. economy but signaled that low inflation would likely keep interest rates low. The Fed chief said that the central bank’s three rate cuts this year have helped to spur home purchases, contributing to the economy’s longest expansion on record. On Tuesday Federal Reserve Board Gov. Lael Brainard called for a major overhaul in how the Fed sets U.S. interest rates, while speaking Tuesday at the New York Association for Business Economics.

In U.S. economic data, the trade deficit fell 6% to $66.5 billion, versus expectations of $70.3 billion, according to a MarketWatch poll of economists, but the U.S. is still likely to post the biggest trade deficit in 2019 in 11 years.

Consumer confidence fell in November for the fourth month in a row, with the Conference Board’s index falling from 125.5 from 126.1 in October, below economists expectations of a 128.2 reading, according to a MarketWatch poll. New-home sales fell in October to a seasonally adjusted annual rate of 733,000, from 738,000 in September. But the Case-Shiller home-price index for September showed home prices rising nationally at a 3.2% annual pace, up from a 3.1% rise in August.

What stocks were in focus?

Walt Disney Co. DIS, -0.11% shares led the Dow’s advance and reached a record high after a report found that close to a million new subscribers a day are signing up for its newly launched digital streaming service, Disney+, less than two weeks after its initial rollout.

Shares of Best Buy Co. Inc. BBY, -1.02%  rose 9.8% after the electronics retailer reported better-than-expected third-quarter sales and profits and raised its guidance for full-year, same-store-sales growth.

Shares of Burlington Stores Inc. BURL, +0.15%  added 8.5% after the company reported a stronger-than-expected rise in third-quarter same-store sales and earnings and revenues that topped estimates.

Shares of Chinese e-commerce giant Alibaba BABA, +3.14% jumped in their debut on the Hong Kong stock exchange on Tuesday, an upbeat launch amid unrest in the former British colony.

Shares of Hewlett Packard Enterprise Co. HPE, -0.19%  were in focus after the computing giant late Monday reported fourth-quarter revenue that fell short of Wall Street forecasts. Shares fell 8% Tuesday.

Xerox Holdings Corp. XRX, +1.31%  shares edged lower after the company said it will take its $33 billion takeover proposal for larger rival HP Inc. HPQ, -1.35%   directly to shareholders unless the two sides are able to agree on access to private financial information.

Shares of Teva Pharmaceutical Industries Ltd. TEVA, +5.88%, Mallinckrodt MNK, +6.05%,   Amneal Pharmaceuticals Inc. AMRX, +7.89%, and Johnson & Johnson   JNJ, +0.42%  and other opioid makers and distributors dropped after the Wall Street Journal reported that the government had launched a criminal probe into corporate ties to the opioid crisis.

Shares of Dollar Tree DLTR, -2.34%, the poorest performer on the S&P 500 and the Nasdaq, plunged 15% after the discount chain’s weaker-than-expected third quarter earnings, but held to its full-year sales forecasts, and it also warned that import tariff increases and store closure costs would trim its bottom line.

The Wall Street Journal reported Monday that activist investor Starboard Value LP took a stake in CVS Health Corp. CVS, +0.13%  and held talk with the drugstore-and-insurance company’s management, according to people familiar with the matter. CVS shares fell 2% Tuesday.

Palo Alto Networks Inc. PANW, +0.86%  stock tumbled 11% after the security-software company reported fiscal second-quarter earnings Monday evening that missed expectations on adjusted earnings and said it would acquire the firm Aporeto for $150 million in cash.

How did other markets trade?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.49%  fell 2.3 basis points to 1.741%, following a retreat lower by British bond yields.

In commodities markets, oil extended Monday’s gains, with West Texas Intermediate Crude for January delivery CLF20, -0.02%  adding 40 cents, or 0.6%, at $58.41 per barrel. Gold prices settled higher, with gold for December delivery GCZ19, +0.19%  rising $3.40, or 0.2% to $1,460.30 an ounce.

In Asia overnight, stocks closed mostly higher, with the China CSI 300 000300, -0.87%  gaining 0.4% and Japan’s Nikkei 225 NIK, -0.49%  adding 0.4%. Hong Kong’s Hang Seng Index HSI, -2.03%, meanwhile fell 0.3%.

In Europe, stocks closed mixed, with the Stoxx Europe 600 SXXP, -0.13%  up 0.1%, to 408.49, reaching a new 52-week high, according to Dow Jones Market Data.