NEW YORK: Wall Street’s main indexes climbed more than 1% each on Thursday as investors assessed a new trade agreement between the United States and Britain, the first such trade deal the US has signed after President Donald Trump paused tariffs last month.
Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to US goods as part of the deal, while a 10% baseline tariff on goods imported from the UK into the US remains in place.
Airline stocks jumped after the US-UK agreement exempted plane parts made by Rolls-Royce from tariffs, with the S&P Passenger Airlines Index up 5.3%.
US Commerce Secretary Howard Lutnick said the UK would buy $10 billion of Boeing aircraft, sending the planemaker’s shares up 3.5%.
Trump said he expects substantive negotiations between the US and Beijing on the trade front this weekend. He also said tariffs on Chinese imports could not get higher than 145%.
“This is what the market has been looking for... some sort of a breakthrough. This does not put to rest some of the uncertainties regarding the trade war effects, but it’s a start,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
At 11:56 a.m. ET, the Dow Jones Industrial Average rose 516.11 points, or 1.26%, to 41,630.08, the S&P 500 gained 68.03 points, or 1.21%, to 5,699.31, and the Nasdaq Composite gained 280.94 points, or 1.58%, to 18,019.10.
Energy stocks led gains among the S&P 500’s 11 sectors with a 2.4% rise, tracking a jump in crude prices.
The domestically focused Russell 2000 small-cap index added 2% and touched a more than one-month high. Most megacap and growth stocks were higher, with Tesla leading gains with a 4.7% rise.
Semiconductor stocks inched 1.9% higher, building on the previous session’s gains after a spokesperson said the Trump administration was planning to rescind and modify a rule that curbed the export of sophisticated artificial-intelligence chips.
The US Federal Reserve held interest rates steady on Wednesday and flagged heightened risks of inflation and unemployment, further clouding the economic outlook for the world’s largest economy.
Traders now see a rate cut only by September and are pricing in a total of 73 basis points of lowering by 2025-end, according to data compiled by LSEG.
Comments
Comments are closed.