Stock indexes concluded higher on Thursday following the U.S.-U.K. trade deal framework that indicated reduced tariffs, offering investors optimism about potential future agreements and the avoidance of a recession.
U.S. stock markets experienced an upturn as details of a trade deal with the United Kingdom were disclosed by the White House. This deal, emerging after President Trump’s previous suspension of reciprocal tariffs, suggested ongoing trade negotiations could stave off a recession.
Both the S&P 500 and the Dow Jones Industrial Average increased by 0.6%, having earlier surged by 1.3%. Meanwhile, the tech-heavy Nasdaq gained 1.1%. Bitcoin climbed to $101,500, crude oil prices rose, and gold prices fell, reflecting decreased investor demand for safe-haven assets.
The agreement preserves a 10% baseline tariff on U.K. imports while reducing duties on cars, steel, and aluminum. In exchange, the U.K. committed to purchasing more U.S. beef and ethanol and reducing import taxes on 2,500 U.S. products.
Chris Zaccarelli, chief investment officer for Northlight Asset Management, noted that markets were seeking any form of trade agreement, even in principle.
President Trump spoke positively of the deal, suggesting it was the first of many, and urged investment in stocks, predicting a rapidly improving economy.
He also mentioned the upcoming U.S.-China trade talks, expressing optimism about their outcome and suggesting current tariffs would decrease from their high of 145.
Strong earnings reports further propelled the S&P 500. Tapestry, owner of fashion brands including Coach, rose 3.7% after surpassing sales and profit expectations. Axon Enterprise, known for the Taser, increased by 14.1% due to strong growth and an improved revenue forecast.
Despite declining confidence levels among consumers and CEOs, the economy has remained resilient, as indicated by the addition of 177,000 jobs last month, steady spending, and low unemployment applications.
However, automakers delivered a warning via the American Automotive Policy Council (AAPC), representing Ford Motor Company, General Motors, and Stellantis. The council’s president, Matt Blunt, expressed disappointment that the U.K. was prioritized over North American partners, noting that the new deal makes U.K. vehicle imports cheaper than those from Mexico or Canada under the USMCA, despite having fewer American parts.
Blunt emphasized this could negatively impact American automakers, suppliers, and workers and hoped this preferential treatment does not become a precedent in future negotiations with other regions.
This article was originally featured on Fortune.com.
