The S&P 500, the broadest of the major measures of US markets, closed at 1,733.15, up 0.67 percent for the day and more than seven points above the previous record closing high of 1,725.52, reached on September 18.
The surge came despite a handful of disappointing quarterly earnings results by blue chips that delivered a loss to the narrower 30-stock Dow Jones Industrial Average.
The S&P 500 gained 11.60 points for the day, also scoring an intraday high of 1,733.45.
The Dow was down 2.18 points (0.01 percent) at 15,371.65, while the Nasdaq Composite jumped to 23.72 points (0.62 percent) to 3,863.15, its highest level since September 2000.
“The mood is serene and positive, the unthinkable was avoided,” said Peter Cardillo of Rockwell Global Capital, referring to the 11th hour deal lifting the Treasury’s debt ceiling in Congress.
Stocks opened lower in a short-lived bout of profit taking that came on the heels of the markets’ nearly 1.4 percent gain Wednesday.
That came in reaction to the news that Washington politicians had broken the deadlock that had shut down the government for over two weeks and threatened to leave the Treasury unable to pay its bills.
They soon reversed course and slowly marched up past the previous S&P 500 high — while leaving the 30-stock Dow behind.
Dow component American Express jumped 5.1 percent after it reported a strong third quarter, with net income of $1.4 billion up 9 percent, ahead of forecasts.
But that was not enough to counter the damage from IBM and Goldman Sachs.
IBM shares sank 6.4 percent after it reported a 4 percent fall in revenues and missed again Wall Street forecasts for the company.
Goldman fell 2.4 percent after posting a 2 percent fall in profit for the third quarter, with revenues diving 20 percent.
EBay sank 4 percent as it cut its fourth-quarter estimate after just matching Wall Street expectations for the third quarter.
After the market closed, meanwhile, Google reported its quarter, showing a 36 percent jump in net profit to $2.97 billion, or $8.75 a share.
Google shares jumped nearly 7 percent in after-hours trade to more than $95, well past the record high of $928.
Bond prices surged for a second day on the news of a Washington deal. The 10-year Treasury yield fell to 2.59 percent from 2.67 percent late Wednesday, while the 30-year fell to 3.66 percent from 3.72 percent.
Bond prices and yields move inversely.