US stocks rise on hopes for trade deals that could forestall a recession
Trader Michael Capolino works on the floor of the New York Stock Exchange, Thursday, May 8, 2025. (AP Photo/Richard Drew)
NEW YORK, United States — US stocks rose Thursday after the United States and United Kingdom announced a deal on trade that would lower some tariffs between the two countries. This is the first of what Wall Street hopes will be enough agreements to keep a recession from hitting the economy.
The S&P 500 climbed 0.6 percent for its 11th gain in the last 13 days. The Dow Jones Industrial Average added 254 points, or 0.6 percent, and the Nasdaq composite rose 1.1 percent.
It wasn’t just stocks. Bitcoin jumped back above $101,000 and crude oil prices climbed. The price of gold eased back as investors felt less need for safety.
Treasury yields rose on bets that more trade deals with other countries may mean the Federal Reserve won’t need to cut interest rates as sharply as feared in order to prop up the economy.
Fears of recession
Stocks and other financial markets have been swinging for weeks with hopes that President Donald Trump could reach such deals that would lower his tariffs. Many investors believe these would cause a recession if left unchecked.
READ: Trump unveils UK trade deal, first since tariff blitz
Trump on Thursday lauded what he called a “maxed-out trade deal” with the United Kingdom. It will keep 10-percent tariffs on UK products but would lower taxes on UK automobiles. This is in exchange for greater access in the UK market for US beef, ethanol and other products.
Trump said it may take weeks to finalize all the details in the UK deal. But he also gave potentially encouraging updates on talks pending with an even bigger trading partner, China.
READ: US, China to hold trade talks in Switzerland
The world’s second-largest economy is set to meet with high-level US officials in Switzerland this weekend. China has been calling for the United States to cancel its tariffs. Meanwhile, Trump has said that he wouldn’t reduce his 145-percent tariffs on Chinese goods as a condition for negotiations.
He was asked on Thursday whether he would consider lowering tariffs on Chinese imports if this weekend’s talks go well.
Trump answered, “It could be. We’re going to see. Right now, you can’t get any higher. It’s at 145. So we know it’s coming down.” He also said he expects the talks in Switzerland to be “substantive.”
Other boost for stocks
Besides hopes for deals on trade, strong profit reports from US companies have also helped to drive the S&P 500 closer to its all-time high set in February. It’s back within 7.8 percent after dropping nearly 20 percent below the mark a month ago.
Axon Enterprise, which sells Tasers, body cameras and other public safety equipment, jumped 14.1 percent after joining the list. It benefited from strong growth for its software and services. It raised its forecast for revenue over the full year.
Tapestry rose 3.7 percent after the company behind the Coach and Kate Spade brands also reported better profit and revenue than expected. It credited new, younger customers in North America, among other things.
Molson Coors, though, described a different landscape when it released its latest quarterly results, which fell short of analysts’ expectations. Its stock fell 4.5 percent.
“The global macroeconomic environment is volatile,” CEO Gavin Hattersley said.
Gavin said uncertainty around the effects of geopolitical events and global trade policy has pressured the beer industry and consumption trends.
It became the latest company to either lower or pull its financial forecasts for 2025 given the uncertainty.
Krispy Kreme tumbled 24.7 percent after withdrawing its forecasts for the full year. The doughnut seller said it made the move in part because of “macroeconomic softness.” Another reason is that it’s pausing the rollout of sales of its doughnuts at more McDonald’s restaurants.
All told, the S&P 500 rose 32.66 points to 5,663.94. The Dow Jones Industrial Average added 254.48 to 41,368.45, and the Nasdaq composite climbed 189.98 to 17,928.14.
