U.S. stocks surged on May 8, 2025, following President Donald Trump’s announcement of a significant trade deal with the United Kingdom, which has sparked optimism about future negotiations with China. The tech-heavy Nasdaq Composite rose approximately 1%, while the S&P 500 and the Dow Jones Industrial Average both climbed around 0.6%, adding about 250 points to the latter. This rally marks a continuation of Wall Street's upward trend, with stocks rising for the second consecutive day after a previous rally on May 7, 2025.
"You better go out and buy stock now," Trump declared during a press conference, emphasizing the potential for increased market access for American exports as a result of the new trade agreement. He described the deal as just the beginning, stating, "This country will be like a rocket ship that goes straight up." The President's comments encouraged investors, who responded positively to the news.
According to Commerce Secretary Howard Lutnick, while the U.S. will maintain a 10% tariff on imports from the UK, there are plans to reduce tariffs on auto and steel imports. Lutnick also noted that the UK is set to purchase $10 billion worth of Boeing planes, which is expected to generate $6 billion in revenue for the U.S.
In addition to the trade deal, Trump hinted at more negotiations with other trading partners, indicating that Treasury Secretary Scott Bessent will travel to Switzerland to meet with Chinese officials over the weekend. When asked about the possibility of lowering the current tariffs on imports from China, which stand at a staggering 145%, Trump responded, "We'll see. Right now, you can't get any higher. It's at 145%, so we know it's coming down." This statement has further fueled investor optimism regarding future trade relations.
Meanwhile, the Federal Reserve decided to hold interest rates steady during its meeting on May 7, 2025. Chair Jerome Powell indicated a cautious approach, emphasizing the economic uncertainties and market volatility stemming from Trump's tariff policies. Trump took the opportunity to criticize Powell, calling him a "fool" who "doesn't have a clue" about the economic landscape.
The cryptocurrency market also reacted positively to the news, with Bitcoin surging above $102,000, marking its highest level since late January. This increase can be attributed to the overall market sentiment following Trump’s announcement, as well as Coinbase's recent deal to acquire the crypto options platform Deribit for $2.9 billion, which further boosted confidence in the sector.
In contrast, gold prices dropped more than 2% on the same day, hovering near $2,308 per ounce, as the easing of trade tensions reduced demand for safe-haven assets. Gold has seen a significant year-to-date gain of 26%, driven by earlier fears related to the global trade war.
Despite the positive market movements, a recent survey from the Federal Reserve Bank of New York revealed that American workers are experiencing the lowest confidence in finding new jobs since March 2021. The survey indicated that the mean perceived probability of securing employment within three months of job loss has fallen to 49.2%. This decline in confidence comes even as the U.S. economy added 177,000 nonfarm payrolls in April, surpassing economists' expectations.
The unemployment rate remains steady at 4.2%, but the survey showed a slight increase in mean unemployment expectations, with the probability of the unemployment rate rising over the next year ticking up to 44.1%. Interestingly, the likelihood of voluntarily leaving a job in the next year has increased slightly, particularly among younger workers and those with lower incomes.
In the corporate sector, Warner Bros. Discovery saw its stock rise by as much as 6% amid speculation about a potential breakup of the company, which has been struggling with debt and operational challenges. Analysts predict that an announcement regarding a corporate restructuring could be on the horizon, as the company aims to separate its traditional cable networks from its more profitable streaming and studio segments.
Palantir Technologies also saw a stock surge of 7.8% as it began to recover from significant losses earlier in the week. The company experienced a 12% drop in stock price following disappointing results in its international business segment, but positive sentiment surrounding Trump's trade deal has provided a boost.
On the other hand, Uber Technologies faced a downgrade from Wedbush analyst Scott Devitt, who adjusted his rating from Outperform to Neutral after mixed first-quarter results. Uber's stock fell approximately 0.5% on May 8, 2025, as analysts expressed concerns about the company's ability to meet investor expectations.
Overall, the day’s trading reflects a complex interplay of optimism surrounding trade deals, economic indicators, and corporate performance. As markets react to these developments, investors will be closely watching the outcomes of upcoming trade negotiations, particularly with China, which could significantly impact the trajectory of U.S. equities moving forward.
