United States
Wall Street closed higher overnight as renewed optimism around global trade lifted equities and pushed bond yields sharply higher. President Donald Trump announced a trade framework agreement with the UK and suggested tariff relief could follow if upcoming talks with China show progress. The remarks triggered a broad-based rally, with cyclical and growth sectors leading the charge.
The S&P 500 rose 0.6%, briefly surpassing its April 2 high before trimming some gains. The Nasdaq 100 advanced 1%, supported by tech and consumer discretionary names, while the Dow Jones Industrial Average added 0.6%. Small caps saw strong inflows, with the Russell 2000 jumping 1.8% amid increased risk appetite.
President Trump framed the UK deal as a “breakthrough,” though many of the details remain to be finalised. The framework allows for faster customs processing and some tariff relief on industrial and agricultural goods. Trump also stated that “many other deals” are progressing and teased that tariff reductions could be on the table if talks with China go well in Switzerland this weekend.
The improving sentiment triggered a retreat in safe-haven assets. 10-year Treasury yields jumped 11 basis points to 4.38%, as investors dialled back expectations for rate cuts. The Bloomberg Dollar Spot Index rose 0.6%, its fourth consecutive session of gains, reflecting a firmer economic outlook.
In corporate news, Paramount Global beat expectations, driven by stronger results from its streaming arm, Paramount+. DraftKings surged in after-hours trade despite disappointing Q1 results, as investors looked beyond short-term margin pressures. Illumina and Sweetgreen both cut forward guidance due to tariff uncertainty and weakening consumer trends, while Coinbase posted higher revenue despite margin compression amid volatile crypto trading.
Europe
European equity markets closed modestly higher, buoyed by the U.S.–UK trade announcement and signs that tariff tensions may be easing, at least in the near term. The Stoxx Europe 600 gained 0.4%, snapping a two-day losing streak. The Euro Stoxx 50 hit its highest level since early April, lifted by strength in industrials, technology, and travel-related stocks.
Companies with strong U.S. exposure, such as Rolls Royce and Diageo, outperformed after the UK confirmed preferential access for American goods. Semiconductor makers like ASML rallied on speculation the Biden-era chip export restrictions may be softened, while Siemens Energy climbed 3.3% after downplaying the impact of tariffs on its supply chain.
While markets welcomed the trade progress, caution lingered as the European Union threatened to impose retaliatory tariffs on over €95 billion worth of U.S. goods if broader talks falter. Still, sentiment improved, helped by the Federal Reserve’s relatively steady tone earlier in the week and improving earnings momentum across Europe.
Bond yields moved in line with global markets, with German Bunds rising to 2.53% and UK 10-year gilts up at 4.55%. Traders remain focused on whether the softening in inflation and recent stability in earnings can offset geopolitical and trade headwinds.
Australia
The Australian sharemarket is expected to open marginally higher, with ASX 200 futures up 3 points to 8,216, following a mixed but generally constructive session in global markets. On Thursday, the S&P/ASX 200 rose 0.2% to 8,191.7, supported by gains in utilities, technology, and industrials. Eight of eleven sectors finished in the green.
Investor sentiment in Australia was lifted by the positive tone out of Washington and London, with the announcement of a trade agreement between the U.S. and UK. President Trump’s comment that negotiations with China could result in further tariff relief provided an additional tailwind. However, a continued 145% tariff on Chinese imports weighed on iron ore, which fell 1.6% to USD 96.80 per tonne.
Utilities led Thursday’s gains. AGL Energy climbed 2% to $10.99, while APA Group added 1.9% to $8.51. The tech sector tracked gains in the Nasdaq, with Computershare rising 3.1% and WiseTech up 3.8%.
On the downside, the major banks struggled. ANZ fell 1.9% after reporting flat profit growth and missing on its net interest margin. Westpac extended its losses, dropping 4.1% as investors continued to digest its earlier results. Defensive sectors such as healthcare were mixed, while Transurban rose 1.7% after outlining plans to reduce its workforce by 300 people as part of an internal review.
Standout corporate moves included Orica, which surged 7.4% to $18.01 after posting a 40% lift in net profit and raising its dividend, and Guzman y Gomez, which rallied 3.7% to $32.99 on the back of strong guidance and U.S. expansion plans.
Today, investors will be watching results from Macquarie Group, QBE Insurance, News Corp and REA Group, along with key developments from U.S.–China trade talks. China’s CPI and PPI data, due Saturday, will also be closely watched for clues on domestic demand.
Commodities
Commodity prices were mixed. Brent crude rose 3.4% to USD 63.19 per barrel, as hopes for stronger global trade and a resilient U.S. economy lifted energy markets. WTI crude followed suit. However, iron ore slipped 1.6% on worries about sustained tariffs on Chinese exports and softer steel demand.
Gold fell 1.7% to USD 3,307.56 per ounce, snapping a recent rally as traders moved out of safe-haven assets. The broader decline in defensive positioning was also evident in currency markets, with the Japanese yen weakening 1.5%, the euro down 0.7%, and the British pound easing 0.4%.
The Australian dollar fell 0.4% to USD 0.6400, tracking softer commodity prices and a firmer U.S. dollar. Despite the dip, the Aussie remains within its recent trading range, with market attention firmly fixed on trade headlines and Chinese data over the weekend.
Bitcoin extended its record run, rising 5.7% to USD 102,383, supported by institutional demand and an improving regulatory backdrop. Ether also saw strong buying, reflecting the bullish trend in digital asset markets.
Economic Calendar
China CPI & PPI (MoM Apr) 11:30 AEDT (Saturday)
This article was written by Paul Darwell, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
