On Thursday, stock futures traded near the flatline as investors expressed optimism regarding the newly announced U.S.-United Kingdom trade deal. Futures linked to the Dow Jones Industrial Average experienced a slight decline of 52 points, or 0.1%, while Nasdaq 100 futures dipped by 0.08%. The S&P 500 futures also fell by about 0.1%. This preliminary trade agreement, announced by President Donald Trump, marks the first significant deal between the U.S. and an international trading partner since the reciprocal tariff announcement made last month.
While the specifics of the trade deal are still being finalized, President Trump indicated that a 10% baseline tariff would remain on goods from the U.K. Although trade with the U.K. is minimal compared to trade with neighboring countries like Canada and Mexico, as well as with China, it serves as a critical test case. Chris Zaccarelli, chief investment officer at Northlight Asset Management, remarked that this agreement could pave the way for further developments in U.S. trade policy.
Zaccarelli stated, "If the administration can follow this up with additional agreements, it would go a long way toward healing a stock market that has been battered and bruised this year." This sentiment reflects a broader hope among investors for a recovery in the stock market.
Following Trump's announcement, stocks surged to session highs, with the President expressing optimism that U.S. negotiators would have productive discussions with China over the weekend regarding trade talks. The major indices ultimately closed the day off their highs, with the Dow increasing by 0.6%, and the S&P 500 also adding nearly 0.6%. The Nasdaq Composite rose approximately 1.1%.
In a significant move, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer are scheduled to meet with their Chinese counterparts in Switzerland over the weekend. Despite the optimism surrounding these discussions, Trump has maintained his 145% tariff on China, even though he previously announced a 90-day pause on higher rates for most countries.
As of this week, the S&P 500 is on track for a 0.4% decline, while the Nasdaq is expected to drop by 0.3%. Conversely, the Dow is showing a modest gain of 0.1%, positioning itself for its third consecutive positive week. These fluctuations highlight the ongoing volatility in the market as investors react to new developments in trade negotiations.
