Stoke on the Market: US-UK Trade Pact Lifts Wall Street Spirits
U.S.-U.K. Pact Provides Optimism for Investors
US stock markets show a hint of optimism as a trade agreement with the UK takes shape, while the prospect of a US-China détente warms investor hearts, if not completely. Boeing's stocks are riding the wave of this new trade deal.
The Dow Jones, the kingpin of US indexes, climbed 0.6% to close at 41,368 points. The tech-savvy Nasdaq and the broad-spectrum S&P 500 followed suit, rising 1.1% to 17,928 points and 0.6% to 5,663 points, respectively.
In the wake of a proposed trade deal, US President Donald Trump and UK Prime Minister Keir Starmer announced the contours of their accord separately, leaving some details to be worked out. The agreement would knock the 10% tariffs on the UK down to 1.8%, but US tariffs on steel and aluminum remain intact. However, Trump's tariffs on steel and aluminum would be lifted altogether.
The aviation sector saw an upswing, with Rolls-Royce aircraft parts no longer subject to tariffs. US Trade Minister Howard Lutnick also mentioned a possible $10 billion purchase of Boeing aircraft by the UK, though the fine print remained fuzzy - whether these figures represent hard orders or simply options. Boeing chose silence on the matter, but its shares surged 3.3%.
A Whiff of Relief in the Air
Trump anticipates intense discussions between the US and China over the weekend, and he's expecting a deal to emerge. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will get together with China's Vice Premier He Lifeng in Geneva on Saturday.
Financial experts offered a cautious outlook. "The market is yearning for a reason to exhale and trust that we're moving away from a full-blown global trade war," stated Scott Welch, Chief Investment Officer at Certuity in Maryland. Trump's charisma notwithstanding, one can never be too sure.
The Dollar Index picked up 1.1% to 100.68 points, while the British pound and the euro drooped against the US dollar. "The market will study the deal's applicability beyond the UK and consider whether it could serve as a template for future pacts," said Standard Chartered's currency strategist, Steve Englander.
Semiconductors Shine
Semiconductor stocks glimmered with hope of eased AI chip export restrictions. The US government plans to lighten the rule restricting advanced chips for AI. Stocks of Nvidia, Broadcom, and AMD glowed, rising by up to 1.4%.
Elsewhere, Krispy Kreme stocks spiraled down 24.7% after withdrawing its forecast due to economic uncertainties and McDonald's partnership issues.
Bitcoin leaped 4.8 percent to $101,427. According to analyst Timo Emden of Emden Research, investors are caressing risky asset classes, oblivious of potential perils and investment risks at present.
Meanwhile, oil prices rose. North Sea Brent crude gained 3.1 percent to $63.03 per barrel, while U.S. WTI rose 3.5 percent to $60.10.
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- Wall Street
- Dow Jones
- Stock prices
- Stock trading
- The US-UK Trade Pact has positively affected Wall Street spirits, with stocks like Boeing's surging after the proposed deal.
- The Dow Jones index, a key US stock market index, climbed significantly amidst this trade optimism.
- In the community's policy discourse, there is a focus on the potential impact of such trade agreements beyond the UK, with the hope that it could serve as a template for future pacts.
