Wall Street surged Thursday on a wave of trade deal optimism, as investors reacted to signals that progress was being made on international trade agreements. President Donald Trump’s announcement that a “full and comprehensive” trade pact with the United Kingdom was imminent helped drive early gains, with investors hopeful that this could be the first of several key breakthroughs that might help prevent a potential recession.
As of mid-morning trading, the S&P 500 rose 0.6%, while the Dow Jones Industrial Average gained 253 points, or 0.6%. The Nasdaq Composite also climbed 0.9%, continuing a recent upward trend that has seen the market notch gains in 11 of the last 13 sessions.
Trump’s UK Deal Spurs Optimism
President Trump stated on Truth Social that the upcoming U.K. agreement would be just the beginning: “Many other deals, which are in serious stages of negotiation, to follow!” he posted. This message bolstered trade deal optimism, which has become a key driver of market sentiment over the past several weeks.
Investors are hopeful that such agreements could lead to a rollback of tariffs that many economists blame for slowing global growth. Of particular interest is whether the U.K. deal might impact the 10% tariffs implemented on all imports into the U.S. on what Trump labeled “Liberation Day.”
However, attention is also turning to larger and more complex trade relationships—particularly with China. Despite recent overtures from Beijing calling for the elimination of U.S. tariffs, Trump has remained firm, declaring he won’t reduce the current 145% tariffs on Chinese imports without new concessions.
Earnings Reports Add to the Positive Mood
While geopolitical developments are a key focus, corporate earnings have also played a significant role in lifting investor spirits.
Tapestry Inc. (NYSE:TPR), the parent company of Coach and Kate Spade, saw its shares jump 5% after reporting better-than-expected profits and revenue. The company credited a growing base of younger North American customers as a key factor in its success.
However, not all earnings news was positive. Molson Coors Beverage Company (NYSE:TAP) fell 7.4% after missing analyst expectations. CEO Gavin Hattersley pointed to global uncertainty, inflation, and shifting consumption habits as major challenges facing the beverage industry.
Another notable decline came from Krispy Kreme Inc. (NASDAQ:DNUT), which dropped a staggering 24.3%. The doughnut maker withdrew its full-year forecast, citing “macroeconomic softness” and a temporary halt in its expansion into McDonald’s restaurants.
Economic Reports Send Mixed Signals
Data released Thursday painted a murky picture of the U.S. economy. Weekly jobless claims showed a slight decline, indicating continued strength in the labor market. On the flip side, a separate report showed worker productivity declining more than expected in Q1, raising concerns that inflationary pressures may persist if output doesn’t keep pace with wage growth.
Rising Treasury yields reflect this tension. The yield on the 10-year U.S. Treasury note rose to 4.29% from 4.26% the previous day, signaling bond investors’ expectations of stickier inflation and potential further interest rate adjustments by the Federal Reserve.
Looking Abroad: Cautious Optimism in Global Markets
Overseas, reactions were more muted. The FTSE 100 slipped 0.1% in London after the Bank of England cut its benchmark interest rate by 0.25 percentage points. Other major indexes in Europe and Asia posted modest gains, as global investors await more clarity on trade negotiations and central bank policies.
Conclusion
The latest rally is a clear sign that trade deal optimism remains a powerful catalyst in today’s market. While headwinds such as high tariffs, inflation, and geopolitical instability remain, signs of negotiation and corporate resilience are enough to keep bullish sentiment alive—for now. Investors will be watching closely to see whether preliminary deals like the one with the U.K. evolve into broader international consensus, capable of supporting long-term economic stability.
Featured Image – Freepik
