Overview:
On Thursday, May 8, U.S. stocks surged, driven by optimism over a new trade agreement between the United States and the United Kingdom—the first significant deal since President Donald Trump’s tariff pause. The agreement included the UK reducing tariffs from 5.1% to 1.8%, while the U.S. maintained a 10% tariff on UK goods. Notably, the UK committed to purchasing $10 billion worth of Boeing aircraft, exempting Rolls-Royce aircraft parts from tariffs.
Energy stocks led the gains, and the Russell 2000 index reached a one-month high. Semiconductor stocks also advanced amid reports of potential relaxation in AI chip export restrictions.
Fear & Greed Index:
Greed – Market sentiment turned positive following the US-UK trade deal and easing tariff tensions, boosting investor confidence.
Key Indices (Closed Prices):
- Dow Jones Industrial Average: +1.26% at 41,630.08
- S&P 500: +1.21% at 5,699.31
- Nasdaq Composite: +1.58% at 18,019.10
Sector Performance:
Winners:
- Energy: Led sector gains with a 2.4% rise.
- Airlines & Aerospace: The S&P Passenger Airlines Index rose 5.3%; Boeing shares gained 3.5% following the UK’s $10 billion aircraft purchase commitment.
- Semiconductors: Advanced on news of potential easing in AI chip export restrictions.
Losers:
- None: All major sectors closed higher, reflecting broad market optimism.
Key Movers:
- Boeing (BA): Shares increased by 3.5% after the UK’s aircraft purchase announcement.
- Rolls-Royce: Benefited from tariff exemptions on aircraft parts.
- Semiconductor Stocks: Gained amid reports of relaxed AI chip export restrictions.
Economic Data:
- Federal Reserve Decision: The Fed held interest rates steady, citing ongoing inflation concerns and economic uncertainty.
- Jobless Claims: Fell more than expected, indicating continued labor market resilience.
- Trade Tensions: The US-UK trade deal eased some concerns, but upcoming US-China trade talks remain a focal point for investors.
Outlook:
Markets are buoyed by the US-UK trade agreement, with investors hopeful for further easing of global trade tensions. Attention now turns to the upcoming US-China trade discussions and potential policy shifts by central banks worldwide.
