Deescalating tensions and lower interest rates were the main drivers of today’s positive session. The US and UK reached a trade deal, boosting confidence among Wall Street investors. However, the deal offset optimism from a UK rate cut, and the UK market finished the session in the red.
Investors cheered the new US–UK trade agreement, while Trump suggested trade talks with China may be more fruitful than initially expected. Britain agreed to lower its tariffs to 1.86% from 5.1%, while the baseline 10% tariff on UK imports into the US will remain unchanged. The DOW added +1.1%, the S&P 500 gained +1.2%, and the NASDAQ rose +1.7%. Airline parts were exempted from the tariffs, pushing Delta up +7.0%. Trump also suggested a potential deal may arise from upcoming US–China trade negotiations. The US two-year Treasury bond yield gained +9 bps to 3.88%, while the US 10-year added +10 bps to 4.47%.
London’s FTSE 100 fell -0.3% despite the Bank of England cutting interest rates by 25 basis points. The pan-European Stoxx 600, on the other hand, closed +0.4% higher. Investors in the region reacted to strong earnings, trade deals between the US and UK, and the BoE’s rate decision. President Trump announced the framework of a trade agreement with the UK. The agreement would raise US$6b in revenue from 10% tariffs on UK imports and create US$5b in new export opportunities for domestic goods. In corporate news, Puma gained +5.0% after it reported sharply lower profit in 1Q due to higher expenses and lower sales. Despite this, the firm maintained its full-year outlook, stating it would reduce 500 corporate positions globally by the end of 2Q25. Siemens Energy jumped +3.3% after it reported 2Q25 net income of €433 million.
The ASX 200 gained +0.2% on hopes that the US–UK trade deal and US–China talks will ease geopolitical tensions globally. ANZ fell -1.9% after reporting 1H25 net interest margin short of expectations. Westpac dropped a further -4.1% as the stock traded without rights to its dividend. The NZX 50 fell -0.2%. Asian benchmarks all moved into positive territory, though gains were modest. China’s CSI 300 led the region with +0.6%, followed by Japan’s Nikkei 225 with +0.4%. Hong Kong’s Hang Seng and the Shanghai Composite added +0.4% and +0.3% respectively, while Korea’s Kospi gained +0.2%.
WTI Crude added +3.2% to US$59.92 per barrel, Iron Ore gained +0.7% to US$99.93 per metric tonne, and Gold fell -1.9% to US$3,300.12 per ounce.