New York

US stocks hit a new high, while the Canadian dollar and Mexican peso scored gains after a report of progress in negotiations over the North American Free Trade Agreement.

The S&P 500 Index approached the 2,600 mark, reaching its highest level on record. While the Thanksgiving holiday gives traders an excuse to pause, equities are heading into the end of the year near their peaks, with investors optimistic about global growth and company earnings. Goldman Sachs Group Inc. raised its 2018 target for the index to 2,850 from 2,500, citing an expansion in profits and valuations.

“Investors can be reassured by the strength and durability of the current economic cycle,” Peter Oppenheimer, Goldman’s chief global equity strategist, said in a note Tuesday. “While it has already been a long cycle, the unwinding of the financial crisis has also meant that, until recently, it has been sub-par in terms of strength — as is often the case following financial crises.”

The loonie rose the most in over two weeks and peso hit a one-month high after Juan Pablo Castanon, head of Mexico’s business chamber, said in an interview that negotiators were close to finishing work on telecom, energy and digital commerce provisions of Nafta. The dollar declined.

Sterling rose and gilts advanced amid reports Prime Minister Theresa May has the backing of ministers to offer the European Union more money to break the Brexit deadlock. West Texas crude gained while gold rose after Monday’s big drop. The euro drifted after dropping the most in three weeks on Monday.

In the US, confirmation that Federal Reserve Chair Janet Yellen will leave the board in February creates a fourth vacancy for President Donald Trump to fill, making it trickier for investors to bet on the central bank’s interest rate trajectory next year.

The Stoxx Europe 600 Index also advanced and German shares outperformed even as the country’s political stalemate continued. The MSCI Emerging Market Index reached its highest in more than six years.

Officials have said the ECB is likely to make multiple small adjustments to its guidance on monetary policy next year rather than any major change in language as it ends quantitative easing. Political developments in Germany are being closely watched even though some have concluded that economic growth won’t be threatened by the collapse in talks between Angela Merkel and potential coalition partners. The German Chancellor said she would prefer new elections if she can’t put together a majority.

“Markets are shrugging off the political issues in Germany,” Peter Boockvar, chief market analyst at Lindsey Group, wrote in an email. “Mario Draghi is the most important factor for European markets, especially in 2018, not German politics.”

Earlier, stocks in Asia recovered some of their recent losses, with Chinese equities rallying as investors reassessed a crackdown on shadow banking that had shaken confidence. The Australian dollar dropped to a five-month low after suggestions from the central bank that interest rates will stay lower for longer. Turkey’s lira hit a record low against the dollar but pared some of the drop after its central bank tightened liquidity.

Terminal users can read more in our Markets Live blog.