US President Donald Trump told investors to start buying stocks and they duly complied as Wall Street rallied on his trade deal with UK prime minister Keir Starmer in what’s hoped to be a de-escalation of the brewing trade war.
Aviation stocks such as Rolls Royce advanced with the agreement providing an exemption for plane parts, while Boeing gained on a complementary deal selling US$10 billion of planes to British Airways owner International Airlines Group.
And Treasury secretary Scott Bessent’s upcoming talks with Chinese officials kept the waters calm, all of which underpinned the greenback and helped push Bitcoin back above US$100,000 for the first time since February.
Meanwhile, something’s brewing for Australia’s Webjet, with reports that a mystery buyer was paying a hefty premium to build up a stake in the ASX-listed online travel agency.
Arcane arts
The S&P 500 was up 1.2% in late trading after Trump and Starmer announced the deal, which still has plenty of finer details to iron out. The US baseline 10% tariff will remain on most goods while levies on steel and aluminium will be reduced to zero, and the UK committed to buying more American-made goods, including planes.
Boeing gained 4.2% on news of its deal with British Airways owner IAG, while engine-maker Rolls Royce was up 3.7%.
“Risk sentiment is higher on trade war de-escalation with a US and UK trade ‘framework’ and President Trump providing positive signals on this weekend’s US-China trade talks and telling everyone to buy stocks,” Bank of New Zealand senior markets strategist Jason Wong said in a note. “Investors got the memo and drove up US equities after that comment and the S&P500 is up 1.3% with an hour of trading left in the session, a solid performance against the backdrop of higher US Treasury yields.”
The kiwi dollar dropped to 59.01 US cents at 7am in Auckland from 59.68 cents yesterday, and declined to 44.54 British pence from 44.77 pence, while Bitcoin jumped 5.4% to US$101,394.
Trump said his administration will now start dealing with the European Union – which separately said it was prepared to impose tariffs on more than US$100 billion of US goods – while Bessent is about to open talks with Chinese officials.
Chipping away
Semiconductor companies such as Intel and Broadcom advanced amid reports that the White House plans to overhaul rules curbing exports of artificial intelligence chips that were due to come into effect next week. Nvidia rose 1.1%.
UK stocks were weaker, with the FTSE 100 index down 0.3%, as investors weighed up the impact of the deal, and also digested the latest quarter-point rate cut by the Bank of England to 4.25%, where policymakers were divided over whether to make a bigger cut or to take things more slowly.
German stock markets gained with the DAX 30 up 1.2%, with defence sector companies joining Rheinmetall higher after the ammunition maker reaffirmed it might beat its 2025 guidance on strong demand across Europe.
Australian futures are pointing to a 0.3% increase for the S&P/ASX 200 index, with earnings expected from Macquarie Group, QBE Insurance, News Corp and REA Group.
Meanwhile, the Australian Financial Review’s Street Talk column reported Macquarie Capital was seeking a 5% stake in Webjet after hours on behalf of an unnamed buyer, who was willing to pay a 37% premium.
No local data is scheduled for today.
Reporting by Paul McBeth. Image from Nik Shuliahin 💛💙 on Unsplash.
