Stocks jumped on Thursday after Bloomberg News reported the U.S. reached a deal in principle with China on trade.

The Dow Jones Industrial Average traded 228 points higher, or 0.8%. The S&P 500 also gained 0.8% while the Nasdaq Compositetraded 0.6% higher. Thursday marked the first time since Nov. 27 that stocks hit record highs.At their session highs, the major averages were all up at least 1%.

Bloomberg's report also said U.S. negotiators had the terms of the so-called phase one deal ready for President Donald Trump.

Trump said in a tweet earlier in the dayboth sides were getting "VERY close to a BIG DEAL with China. They want it, and so do we!" The major indexes hit record highs following Trump's tweet.

CNBC confirmed reportsfrom earlier in the day that saidU.S. negotiators are offering to cancel new China tariffs and reduce existing levies on Chinese goods by up to 50% on $360 billion worth of imports. The latest trade news comes ahead of a key Sunday deadline.If an agreement is not reached by Sunday, additional U.S. levies on Chinese products will take effect.

Reports from Bloomberg News and The Wall Street Journal earlier in the week suggested that the U.S. could delay those additional tariffs. However, National Economic Council Director Larry Kudlow said Tuesday the charges were "still on the table."

President Donald Trump

Saul Loeb | AFP | Getty Images

Caterpillar shares jumped 1.1% on Thursday while Micron Technology advanced 2.8%. The VanEck Vectors Semiconductor ETF (SMH) and the iShares PHLX Semiconductor ETF (SOXX) both rose about 2% and hit all-time highs.

Bank stocks also got a lift as Treasury yields rose. The SPDR S&P Bank ETF (KBE) climbed 2% and hit a 52-week high. J.P. Morgan Chase, Bank of America and Citigroup all traded at least 1.4% higher. The benchmark 10-year Treasury yield advanced to 1.892% while the 2-year rate traded at 1.67%.

Stocks started December on the wrong foot as worries around U.S.-China trade relations increased. In the first two sessions of the month, the Dow lost more than 500 points.

The world's two largest economies have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.

Still, the major averages are up sharply for the year. The S&P 500 and Dow have jumped 25.9% and 20%, respectively, year to date. The Nasdaq is up around 30%.

Next year, however, should be tougher on Wall Street, CalSTRS CIO Christopher Ailman said.

"It will be choppy," Ailman told CNBC's Brian Sullivan in an interview that aired Thursday. "This is going to be another election year. Remember 2016? That was a really hard year where the market slugged it out to generate a positive return. We may have that kind of year because of all the rhetoric we're going to hear."

Weekly jobless claims jumped last week by 49,000 to 252,000, the Labor Department said. That is their highest level since the week that ended Sept. 30, 2017.

The data comes after the Federal Reserve held interest rates steady on Wednesday. The central bank also indicated it would likely not make any policy changes through at least 2020. The U.S. central bank's decision to keep borrowing costs unchanged was unanimous, following several dissents in recent meetings.

"This is as hardened a 'wait and see' stance as we have seen in many years, and is particularly striking since so many of the crucial macro issues are yet to be resolved," Michael Shaoul, chairman and CEO of Marketfield Asset Management, said in a note.

CNBC's Sam Meredith contributed to this report.

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Stocks rebound back to the highs of the day on report phase one deal is reached - CNBC