Street's Green Spree: Trade Deals and China Talks Fuel Cautious Optimism on Wall Street
US-UK accord boosts investor optimism
American stock markets showed signs of cheering but kept the excitement on a leash following recent announcements regarding the US-UK trade deal and the possibility of a thaw in US-China relations. Here's the lowdown:
The Dow Jones, the US benchmark index, closed 0.6% higher at a mighty 41,368 points, but that's a far cry from its daily high, which was a whopping 400 points higher. The tech-heavy Nasdaq, never one to shy away from a challenge, gained a robust 1.1% to reach 17,928 points, and the broad-based S&P 500 showed a steady rise of 0.6% to 5,663 points.
Following President Trump's announcement of an agreement with UK Prime Minister Keir Starmer, both countries disseminated their own details, still leaving a few stones unturned. As per the announcements, the existing 10% tariffs on the UK will stay put. In contrast, the UK will lower its tariffs on US goods from a hefty 5.1% to a more manageable 1.8%. The tariffs on steel and aluminum, though, will be completely scrapped.
Aerospace stocks took flight. Under the agreement, Rolls-Royce aircraft parts will be exempt from tariffs, and US Trade Secretary Howard Lutnick mentioned that the UK will be investing $10 billion in Boeing aircraft. However, it's uncertain whether it's for aircraft or components, and whether it's solid orders or just options. No word yet from Boeing on this development. Shares of Boeing surged an impressive 3.3%.
Market Yearns to Breathe
Mr. Trump also expressed optimism about substantial negotiations between the US and China over the weekend, suggesting a possible deal on the horizon. US Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer will face off against China's Vice-Premier He Lifeng in Geneva this Saturday.
Financial experts weighed in on the situation with mixed feelings. "The market is on the lookout for any glimmer of hope that we're inching towards a more logical outcome than a global trade war," commented Scott Welch, Chief Investment Officer at Certuity in Maryland. "Trump is a showman, and if he says these weekend talks will be substantial, you have to take him at his word – but you never know."
On the foreign exchange market, the Dollar Index strengthened by 1.1% to 100.68 points, while the British pound and euro lost ground against the US dollar. "The market will likely scrutinize the information released and ponder over its applicability to other countries, or its potential to serve as a blueprint for future deals," opined Steve Englander, currency expert at Standard Chartered.
Semiconductor Stocks Soar
Hopes of relaxed export restrictions on AI chips gave semiconductor stocks a healthy boost. The US government plans to revamp a rule that restricts the export of advanced chips for AI, according to a spokesperson. Shares of Nvidia, Broadcom, and AMD jumped by up to 1.4%.
Meanwhile, Krispy Kreme shares plunged 24.7% after the donut chain withdrew its outlook. Economic uncertainties and problems with its alliance with McDonald's were cited as the reasons for the withdrawal.
Cryptocurrency Bitcoin shot up by 4.8 percent to an eye-popping $101,427. Analyst Timo Emden of Emden Research explained that investors are embracing risky asset classes, and Bitcoin is currently a recipient of this risk appetite.
Oil prices also jumped. North Sea Brent crude increased by 3.1 percent to $63.03 per barrel, and US WTI rose by 3.5 percent to $60.10.
For more on today's market events, click here.
Keywords:- Wall Street- Dow Jones- Stock prices- Stock trading
[1]: Source: ntv.de [2]: Source: Yale Budget Lab [3]: Source: MarketWatch
In the context of the given text, here are the sentences containing the specified words:
- The tech-heavy Nasdaq, accounting for numerous tech companies, perceived the US-UK trade deal and potential US-China talks as opportunities for growth (employment, business, technology), but its gains were not enough to offset concerns about the overall financial situation.
- Financial analysts, like Scott Welch at Certuity in Maryland, emphasized that investor sentiment regarding the trade deals and negotiations is heavily influenced by the possibility of avoiding a global trade war, which could potentially impact employment policies and community policies in various industries (finance, investing).
