US stocks climbed at the open Thursday as investors welcomed news of a trade agreement between the US and the UK — a widely anticipated development that some traders say could serve as a blueprint for broader global negotiations.
The S&P 500 Index rose 0.6% by 9:32 a.m. in New York, while the Nasdaq 100 Index advanced 0.9%. The Dow Jones Industrial Average gained 0.6% and Russell 2000 Index climbed 1%.
Among individual stocks, Peloton Interactive Inc. shares fell 13% after the fitness company’s revenue sank 13% last quarter, marking the third consecutive year-over-year decline. Handbag maker Tapestry Inc. shares rose 4.4% after the company raised its annual outlook again, defying concerns over weakening consumer sentiment and trade uncertainty. Match Group Inc. fell 3.6% after announcing plans to eliminate 13% of its workforce, including one in five managers, the latest move in a turnaround effort.
Shares of drugmakers slumped following a Politico report that the Trump administration plans to revive a proposal to dramatically slash drug costs by tying the amount the government pays for some medicines to lower prices abroad.
Still, investors remain focused on a flurry of trade-related news that continue to come in at a rapid pace.
President Donald Trump said the US has secured what he described as a comprehensive trade agreement with the UK, with more details expected at a White House press conference at 10 a.m. in Washington. Meanwhile, the European Union is planning to hit €95 billion ($108 billion) of US exports with additional tariffs if negotiations with Trump’s team falter. Traders are also digesting news that the administration plans to rescind some Biden-era curbs on chipmakers. Chip stocks were up strong on the news.
“The market’s momentum looks to continue to the upside as the potential US/UK trade deal could set the framework for trade deals with other countries and reduce the trade-driven tension market and economic overhang,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners.
Even so, market watchers caution that trade deals often take years to finalize.
“Given that full trade deals take years to negotiate, this will likely be a framework and it will be interesting to see whether the 10% baseline tariff stays as that will provide an important template for negotiations with other countries and a good guide to the long-term tariff strategy of the US,” said Jim Reid, global head of macro research and thematic strategy at Deutsche Bank AG.
Earnings season also remains in focus. Data compiled by Bloomberg found that fewer US companies are topping earnings estimates this season, with consumer discretionary and staples sectors among the weakest performers.
Economic data released Thursday painted a mixed picture. US labor productivity declined in the first quarter — the first drop in nearly three years — while jobless claims fell after a temporary spike during the spring recess and the Easter holiday.
Outside of US, the Bank of England cut interest rates by a quarter point to 4.25%, citing risks from the global trade slowdown.
On the geopolitical front, tensions between India and Pakistan continue as the two countries shot down drones and missiles over densely populated cities in a second day of military hostilities.
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