US stocks rise after Trump announces UK trade deal
Trader Thomas Lee, left, and specialist Genarro Saporito work on the floor of the New York Stock Exchange, Thursday, May 8, 2025. (Photo: AP/Richard Drew)
NEW YORK: Stock markets mostly rose on Thursday (May 8) as US President Donald Trump unveiled a trade deal with Britain, boosting hopes for other countries' tariff negotiations.
After the turbulence sparked by Trump's "Liberation Day" tariffs on Apr 2, markets have strengthened in recent weeks on optimism that countries will reach agreements with Washington to avoid his potentially damaging levies.
"The trade deal news ... sets the table for the market that it should expect more deals in coming weeks and months," said Briefing.com analyst Patrick O'Hare.
"From that vantage point, it is providing a sentiment boost."
The deal reduces tariffs on British cars and lifts them on steel and aluminium, while in return Britain will open up markets to US beef and other farm products.
British Prime Minister Keir Starmer also hailed it as a "historic day", although the agreement is thin on details and both sides said there would be more negotiations.
A 10 per cent baseline tariff on Britain imposed by Trump on Apr 2 also remains in place.
Top Chinese and US negotiators are set to meet on Saturday and Sunday in Switzerland for their first talks since Trump unveiled his tariff assault.
The gathering has fuelled hopes for a dialling down of tensions between the world's economic superpowers, which have seen Washington impose levies of 145 per cent on China and Beijing retaliate with 125 per cent tariffs of its own.
But there are concerns that little substantial progress will be made.
"It is clear the market is already pricing in some level of trade optimism ... but without actual deals (outside of the US-UK) inked, it's hard to justify further upside," Razaqzada said.
While London and Washington closed in on a deal, the EU warned it would target US products, including planes and cars, worth 95 billion euros in retaliation for Trump's tariffs if their own negotiations fall flat.
Wall Street indices spent the entire day in positive territory, with the S&P 500 finishing up 0.6 per cent.
But London's blue-chip FTSE 100 index dipped into the red, shedding 0.3 per cent as the Bank of England trimmed its main interest rate by a quarter point to 4.25 per cent but warned that US tariffs were weighing on global growth.
Bitcoin climbed above US$100,000 for the first time since February, while the dollar strengthened against the euro and other major currencies.
Frankfurt led European equity gains after data showed German industrial production jumped more than expected in March, a boost for Europe's biggest economy.
Paris also climbed, tracking gains in Tokyo, Hong Kong and Shanghai.
Elsewhere, the Swedish and Norwegian central banks kept their rates unchanged, with both hinting that future cuts are possible despite economic uncertainty in the wake of US tariffs.
That comes after the US central bank on Wednesday paused rate cuts and warned of higher risks to its inflation and unemployment goals, in a likely reference to Trump's tariff rollout.
Trump again hit out at Federal Reserve boss Jerome Powell for not cutting rates, calling him a "fool", despite comments last month roiling markets over fears the president could try to oust him.
Analysts do not expect the Fed to cut rates until July at the earliest.
