Wall Street Rallies on UK Trade Deal Hopes, Strong Sector Gains and Global Market Optimism
Markets surged as Trump unveiled a UK trade framework, airline and energy stocks soared and global indices showed strength; bond yields also jumped.
The Nasdaq jumped 189.98 points or 1.1 percent to 17,928.14, the Dow advanced 254.48 points or 0.6 percent to 41,368.45 and the S&P 500 climbed 32.66 points or 0.6 percent at 5,663.94.
President Trump announced a trade agreement framework with the U.K., boosting Wall Street optimism. The deal promises greater U.S. market access, especially in agriculture, despite retaining a 10% tariff. It follows news of upcoming U.S.-China trade talks, reducing global trade uncertainty. Experts see this as a test case for future deals that could revive the struggling stock market.
Labor Department showed first-time claims for U.S. unemployment benefits saw a modest decline in the week ended May 3rd. It released a separate report showing a pullback by U.S. labor productivity in the first quarter of 2025 along with a sharp increase by unit labor costs.
Airline stocks turned in some of the market's best performances, with the NYSE Arca Airline Index soaring by 4.2 percent. A sharp increase by the price of crude also contributed to substantial strength among energy stocks, driving the Philadelphia Oil Service Index and the NYSE Arca Oil Index up by 2.8 percent and 2.6 percent. Financial, computer hardware, housing and software stocks also saw considerable strength while gold and pharmaceutical stocks showed significant moves to the downwards.
Asia-Pacific stocks moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index climbed by 0.4 percent, while China's Shanghai Composite Index rose by 0.3 percent. The major European markets turned mixed over the course of the session. While the U.K.'s FTSE 100 Index fell by 0.4 percent, the French CAC 40 Index advanced by 0.9 percent and the German DAX Index jumped by 1.0 percent.
In the bond market, treasuries pulled back sharply after moving higher over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, surged 9.8 bps to 4.37 percent.
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