Wall Street surged into record territory on Friday, buoyed by progress towards a trade deal between the United States and China and signals from Washington that it could finalise tariff agreements with over a dozen other trading partners.
With the Israel-Iran ceasefire holding, investor focus shifted back to the broader economy and President Donald Trump’s trade policies.
President Trump had imposed a 10-per-cent tariff on goods from nearly all countries in early April, but he delayed higher rates on numerous nations until July 9 to allow for negotiations.
On Thursday, he announced that the United States had signed a trade deal with China, though he provided no further details. China confirmed on Friday that Washington would lift “restrictive measures,” while Beijing would “review and approve” items under export controls.
David Morrison, an analyst at Trade Nation, commented that “While details remain sparse, the announcement removed another layer of uncertainty from the global risk environment.”
He added that investors welcomed the confirmation as a positive sign for supply chains and global trade, despite the vague implementation timeline.
US Treasury Secretary Scott Bessent further indicated that Washington aims to reach key tariff deals with over a dozen partners in the coming months, potentially completing its trade agenda by early September.
The US is focusing on agreements with 18 key trading partners.
Both the S&P 500 and Nasdaq Composite indices reached record highs on Wall Street. These gains occurred despite the US Federal Reserve’s preferred inflation measure, the core personal consumption expenditures price index, showing a higher-than-expected 0.2 per cent increase in May.
Bret Kenwell, an eToro US investment analyst, suggested that while the inflation report shouldn’t significantly alarm markets, it likely dashed hopes for a July rate cut and might cause some hesitation as stocks hit record highs nearing quarter-end.
European stock markets also saw gains, led by the Paris CAC 40, which was boosted by luxury stocks. Traders largely overlooked data indicating a slight rise in inflation in France and Spain in June, even as it fuelled speculation that the European Central Bank might pause its interest rate-cut cycle.
In Asia, Tokyo rallied over one per cent to surpass 40,000 points for the first time since January, while Hong Kong and Shanghai equities closed lower.
The dollar remained near three-year lows on Friday, as traders anticipated US interest rate cuts, especially after Trump hinted at potentially replacing Fed chief Jerome Powell.
Weak economic data from Thursday, showing a larger-than-expected contraction in the US economy during the first quarter and softer consumer spending, further fueled these rate cut expectations.
Key figures at around 1530 GMT:
- New York—Dow: UP 0.9 per cent at 43,783.12 points
- New York – S&P 500: UP 0.6 per cent at 6,177.84
- New York – Nasdaq Composite: UP 0.6 per cent at 20,280.39
- London – FTSE 100: UP 0.7 per cent at 8,798.91 (close)
- Paris – CAC 40: UP 1.8 per cent at 7,691.55 (close)
- Frankfurt – DAX: UP 1.6 per cent at 24,033.22 (close)
- Tokyo – Nikkei 225: UP 1.4 per cent at 40,150.79 (close)
- Hong Kong – Hang Seng Index: DOWN 0.2 per cent at 24,284.15 (close)
- Shanghai – Composite: DOWN 0.7 per cent at 3,424.23 (close)
- Euro/dollar: UP at $1.1714 from $1.1701 on Thursday
- Pound/dollar: DOWN at $1.3713 from $1.3725
- Dollar/yen: UP at 144.81 yen from 144.44 yen
- Euro/pound: UP at 85.43 pence from 85.22 pence
- West Texas Intermediate: UP 1.1 per cent at $65.96 per barrel
- Brent North Sea Crude: UP 0.7 per cent at $67.17 per barrel
