Stock markets surged on Thursday after the White House shared the outlines of a trade deal with the United Kingdom. The first such deal after President Donald Trump pressed pause on reciprocal tariffs with the world a month ago, it gave Wall Street hope that the U.S. can continue trade negotiations and hopefully avoid a recession.
The S&P 500 and the Dow closed up by 0.6%, after surging as high as 1.3% earlier in the day. The tech-heavy Nasdaq rose 1.1%.
Bitcoin rose to $101,500, and crude oil prices climbed, while the price of gold fell as investors felt less need for safety.
The deal keeps in place a 10% baseline tariff on U.K. imports but cuts duties on cars, steel, and aluminum. In return, the U.K. promised to buy more U.S. beef and ethanol and lower import taxes on 2,500 U.S. products.
"A trade agreement—even if it’s an agreement in principle—is what the markets were looking to see," Chris Zaccarelli, chief investment officer for Northlight Asset Management, said in a note.
Trump talked up the deal, which he implied would be the first of many. "You better go out and buy stock now," he told reporters in the Oval Office, adding that the economy "will be like a rocket ship that goes straight up."
He also teased the U.S.-China trade negotiations scheduled for this weekend, saying he expects them to be "substantive." Of the tariffs, he said, "right now, you can’t get any higher. It’s at 145. So we know it’s coming down.”
Elsewhere, strong earnings reports from a variety of companies helped drive the S&P 500 higher. Tapestry, which owns fashion brands Coach, Kate Spade and Stuart Weitzman, rose 3.7% after reporting better-than-expected sales and profits thanks to pulling in more young customers. Axon Enterprise, the maker of the Taser, gained 14.1% on strong growth and a boosted revenue forecast.
Despite falling confidence among consumers and CEOs, the economy has so far proved resilient, with 177,000 jobs added last month just as tariffs were being announced, spending steady and unemployment applications low.
However, automakers issued a warning through the American Automotive Policy Council (AAPC), which represents Ford Motor Company, General Motors, and Stellantis. In a statement, the council's president noted the U.S. auto industry remains "highly integrated with Canada and Mexico; the same is not true for the U.S. and UK."
"We are disappointed that the administration prioritized the UK ahead of our North American partners," said Matt Blunt. "Under this deal, it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA compliant vehicle from Mexico or Canada that is half American parts."
Blunt said that hurts American automakers, suppliers, and auto workers.
"We hope this preferential access for UK vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors," Blunt said.
This story was originally featured on Fortune.com
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