- Stock indexes Closed higher on Thursday after the outlines of a US-UK trading deal with lowering tariffs became clear, giving investors hope that more deals can reach and avoid a recession.
Stock markets grew stronger on Thursday after the White House shared the outlines of a trade deal with the United Kingdom. The first of such a deal after President Donald Trump insisted on pauseing the world's rewards tariffs a month ago, it gave Wall Street hope that the US could continue trade negotiations and would have avoided a backwards.
The S&P 500 and the Dow closed 0.6%, avoiding acquisitions as high as 1.3% earlier in the day. The tech-heavy Nasdaq rose 1%.
Bitcoin rose above $ 101,000, and crude oil prices went up, as the price of gold fell as investors were less needed for safety.
The Deal Maintains a 10% baseline tariff in the UK imports but cuts duties in cars, steel, and aluminum. In return, the UK has promised to buy more US beef and ethanol and lower tax imports to 2,500 US products.
“A trade agreement – even if it is an agreement with principle – is what markets are looking for,” Chris Zaccarelli, chief investment official for Northlight Asset Management, said on a note.
Trump talked about the deal, which he indicated would be the first of many. “You better go out and buy stock now,” he told reporters at the Oval Office, adding that the economy “would be like a rocket ship going straight.”
“While trading with the UK pales compared to trade with our neighbors north and south, and especially compared to China, this is an important test case and a model for what can be done.”
The US and China are set meet in Switzerland This week to start negotiations in terms of a trade deal.
Despite the collapse of confidence in consumers and CEOs, the economy has been proven to be resilient, with 177,000 jobs added last month as the tariffs have announced, who spend stable and unemployment applications.
However, automakers issued a warning by the American Automotive Policy Council (AAPC), which represents the Ford Motor Company, General Motors, and Stellantis. In a statement, the Council president noted that the auto auto industry remains “highly integrated into Canada and Mexico; both are not true for the US and the UK.”
“We failed that the administration had put the UK leading our North American partners,” Matt Blunt said. “Under this deal, it would be cheaper to import a vehicle in the UK with very little US content than a following USMCA vehicle from Mexico or Canada half of American parts.”
Blunt said it hurts American automakers, suppliers, and auto workers.
“We hope that the desire to access for UK vehicles in North Americans does not set a decision for future negotiations with competitors in Asia and Europe,” Blunt said.
This story was originally featured on Fortune.com
