Friday’s session on Wall Street ended with slight declines across most major indexes, as investors approached the upcoming weekend trade talks between the United States and China with caution. This somewhat overshadowed the optimism following Thursday’s trade agreement between the U.S. and the United Kingdom.
Many of the recent gains can be attributed to relief stemming from a pause in tariffs and the trade deal between the U.S. and the UK. “Looking at recent reports, there is a sense that the worst is behind us,” said Thomas Brenier of the Paris office of Lazard Freres Gestion. He added that he is more optimistic about the outlook for European markets due to an improving macroeconomic picture.
Optimism emerged in the markets after U.S. President Donald Trump on Thursday outlined a trade agreement with the United Kingdom—the first deal concluded by the U.S. with a country whose imports had been subject to new American tariffs since early April. Trump indicated that the agreement includes “billions of dollars in increased market access for U.S. exports,” and that the UK “will reduce or eliminate numerous non-tariff barriers that unfairly discriminated against American products.”
“While U.S. trade with the UK is small compared to trade with neighboring countries, and especially compared to trade with China, it is an important test and a model for what can be achieved,” said Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management.
“If the U.S. administration is able to conclude further deals following this one, it will go a long way toward healing the stock market, which has taken a significant hit this year,” he added. Investors are now eagerly awaiting the U.S.-China trade negotiations, set to begin this weekend.
President Donald Trump is determined to maintain the baseline 10% tariff rate on foreign imports regardless of any trade agreements, said White House spokeswoman Karoline Leavitt on Friday. She also stated that Trump will not lower tariffs on Chinese goods without concessions from Beijing.
Leavitt made these comments regarding the preliminary trade agreement between the U.S. and the UK, which stipulates that the U.S. will retain a 10% baseline tariff rate on most British products.
“This 10% baseline will still be in place at the end when all other details of the agreement are finalized. The President is committed to maintaining these 10% baseline tariffs—not just for the United Kingdom, but also in trade negotiations with all other countries,” said Leavitt.
She also commented on the upcoming trade talks between U.S. and Chinese delegations scheduled for Saturday and Sunday in Switzerland—the first since the start of the trade war between the two powers. Addressing Trump’s earlier social media post suggesting a reduction of tariffs on Chinese goods from 145% to 80%, Leavitt remarked that this was a figure Trump “simply threw out, and we’ll see what happens next.”
In oil markets, May WTI crude contracts rose by 1.79% to $60.97 per barrel, while June Brent futures climbed 1.62% to $63.86 per barrel.
