Crypto Rise as Trump Announces US-UK Trade Deal, Softens Rhetoric on China
U.S. stocks closed higher Thursday after President Donald Trump announced a new trade agreement with the United Kingdom and signaled optimism about upcoming talks with China.
“A trade agreement — even a preliminary one — is what markets were hoping to see,” said Chris Zaccarelli, chief investment officer at Northlight Asset Management.
Investor sentiment turned positive throughout the day as Trump struck a more conciliatory tone on China and encouraged investment in U.S. markets. “You better go out and buy stock now,” Trump said at a White House press conference. “This country will be like a rocket ship going straight up.”
Stocks wobbled earlier in the session but rallied after Trump said he expected a “good weekend” of trade negotiations with Chinese officials. Asked whether he might consider easing tariffs on China, Trump responded, “Well, it could be,” adding, “I think we’re going to have a very good relationship.”
Bitcoin surged past $101,000 for the first time since February, while demand for traditional safe-haven assets like gold and U.S. government bonds weakened. Gold fell 2% to drop below $3,300 per troy ounce, and the yield on the 10-year Treasury note climbed to 4.37% as bond prices declined.
Investor confidence also showed up in the CNN Fear & Greed Index, which hit its highest level since early December. The index has moved sharply from “fear” to “greed” territory in recent weeks.
The U.S. dollar index rose 1% against a basket of major currencies, reflecting stronger risk appetite and support from the trade news.
Sarah Bianchi, senior managing director at Evercore ISI, said the U.K. was a relatively easy partner for the U.S. to strike a deal with, noting the two countries already have a merchandise trade surplus. However, she pointed out that the agreement maintains the existing 10% tariff baseline. “If the UK isn’t getting to zero, it’s very unlikely anyone else will,” Bianchi said in a note.
While the full details of the U.S.-UK deal remain unclear, market analysts say the announcement alone helped reinforce bullish sentiment.
“The headline is positive, even if questions remain about the structure of the deal and the timeline for others,” said Robert Ruggirello, chief investment officer at Brave Eagle Wealth Management. “That’s enough to keep the market’s momentum going.”
Featured image from: lseblogs.com