Wall Street Hits Record Highs on Trade Deal Progress
Wall Street soared to new record levels on Friday, driven by positive developments in trade negotiations between the United States and China. The optimism was further fueled by indications from Washington that tariff agreements with several other trading partners could soon be finalized.
Following a successful Israel-Iran ceasefire, investor attention shifted back to the broader economy and President Donald Trump’s trade policies. In early April, President Trump imposed a 10% tariff on goods from nearly all countries, but he postponed higher rates until July 9 to allow for negotiations.
On Thursday, Trump announced the signing of a trade deal with China, although specific details were not disclosed. China confirmed on Friday that the US would lift certain restrictions, while Beijing would review and approve items under export controls.
David Morrison, an analyst at Trade Nation, noted that the announcement reduced uncertainty in the global risk environment. Investors viewed the confirmation positively for supply chains and global trade, despite the lack of a clear implementation timeline.
US Treasury Secretary Scott Bessent indicated that the US aims to finalize key tariff deals with over a dozen trading partners in the coming months, potentially completing its trade agenda by early September. The focus is on agreements with 18 key trading partners.
Despite the US Federal Reserve’s inflation report showing a higher-than-expected increase in May, both the S&P 500 and Nasdaq Composite indices reached record highs on Wall Street. The inflation data may have dashed hopes for a July rate cut, prompting some caution as stocks hit new highs.
European stock markets also saw gains, with the Paris CAC 40 leading the way due to strong performance in luxury stocks. Despite a slight rise in inflation in France and Spain in June, traders largely ignored the data as speculation grew about the European Central Bank pausing its interest rate-cut cycle.
In Asia, Tokyo’s market rallied over one per cent to surpass 40,000 points for the first time since January, while Hong Kong and Shanghai closed lower.
The dollar remained near three-year lows on Friday as traders anticipated US interest rate cuts, especially following Trump’s hint at potentially replacing Fed chief Jerome Powell. Weak economic data from Thursday, showing a larger-than-expected contraction in the US economy in the first quarter and softer consumer spending, further fueled expectations of rate cuts.
Key Figures as of 1530 GMT:
- New York—Dow: UP 0.9% at 43,783.12 points
- New York – S&P 500: UP 0.6% at 6,177.84
- New York – Nasdaq Composite: UP 0.6% at 20,280.39
- London – FTSE 100: UP 0.7% at 8,798.91 (close)
- Paris – CAC 40: UP 1.8% at 7,691.55 (close)
- Frankfurt – DAX: UP 1.6% at 24,033.22 (close)
- Tokyo – Nikkei 225: UP 1.4% at 40,150.79 (close)
- Hong Kong – Hang Seng Index: DOWN 0.2% at 24,284.15 (close)
- Shanghai – Composite: DOWN 0.7% 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% at $65.96 per barrel
- Brent North Sea Crude: UP 0.7% at $67.17 per barrel
