Momentum built across global markets on Thursday after President Trump outlined a preliminary trade agreement with the United Kingdom, marking the first such accord since the rollout of sweeping US tariffs. Optimism extended further as investors looked ahead to a key round of US-China trade talks and digested a rate cut from the Bank of England. Major US benchmarks finished higher, led by tech and industrials, while oil and Treasury yields climbed on the improving trade outlook. Bitcoin also surged past a key psychological level, reinforcing the broader risk-on sentiment that defined the session.

Key Takeaways:

  • Dow Jumps Nearly 255 Points on Trade Progress: The Dow Jones Industrial Average gained 254.48 points, or 0.62%, to close at 41,368.45 after President Trump unveiled a preliminary trade framework with the United Kingdom. 
  • S&P 500 Advances as Tech and Industrials Rally: The S&P 500 rose 0.58% to end at 5,663.94, lifted by broad strength in industrial and technology sectors. Tech stocks rallied after the rollback of Biden-era chip restrictions.
  • Nasdaq Outperforms on Alphabet Strength: The Nasdaq Composite climbed 1.07% to finish at 17,928.14, outperforming peers as large-cap tech names regained momentum. Alphabet jumped nearly 2%, leading gains among megacaps. 
  • Europe Mixed as FTSE Falls on Trade Deal, BoE Cuts Rates: European markets were broadly higher, with the CAC 40 up 0.9%, the DAX adding 1.02%, and Italy’s FTSE MIB climbing 1.71%. However, the UK’s FTSE 100 fell 0.32%, snapping its record winning streak as investors reacted to the US-UK deal and a surprise EU warning of potential retaliatory tariffs. The Bank of England cut rates to 4.25% in a divided vote, with policymakers split on how aggressively to ease policy amid global trade uncertainty.
  • Asia Mostly Higher as China Eases, Fed Holds Rates: Asia-Pacific equities edged higher, supported by the Fed’s steady stance and China’s monetary easing. The PBoC lowered the cost of short-term funding to 1.4% and injected nearly 159 billion yuan into the system. The Nikkei rose 0.41%, the Kospi added 0.22%, and the Hang Seng gained 0.37%. Australia’s ASX 200 closed up 0.16%, while the CSI 300 climbed 0.56% on renewed stimulus hopes. The Philippines reported 5.4% Q1 GDP growth, just shy of estimates.
  • Oil Rallies 3% on China Talks Optimism: Crude oil prices surged, with Brent gaining nearly 3% to $62.84 and WTI closing above $59. Hopes for progress in US-China trade negotiations drove the move, as officials confirmed high-level meetings this weekend. While supply concerns remain from rising OPEC+ output, traders focused on the demand outlook amid signs of easing geopolitical tensions.
  • Treasury Yields Rise as Growth Outlook Improves: Treasury yields jumped after the US-UK trade framework and news of upcoming China talks boosted growth expectations. The 10-year yield rose to 4.39% and the 2-year climbed to 3.89%. Markets appeared to welcome the forward momentum in global diplomacy despite the lack of finalised deals.
  • US Macro Signals Mixed as Labour Market Holds Firm, Costs Accelerate: Jobless claims dropped to 228,000 last week, reversing a temporary spike and signalling steady labour market conditions. Continued claims also declined, reinforcing a stable employment backdrop. However, Q1 productivity fell 0.8%, while unit labour costs surged 5.7% on rising compensation. The data reflects a tight but increasingly expensive labour environment. 
  • Bitcoin Reclaims $100K as Risk Sentiment Improves: Bitcoin surged nearly 5% to trade above $100,000 for the first time since February. The rally coincided with renewed market optimism following Trump’s trade announcement, and gained further momentum from rising risk appetite. Other cryptocurrencies also jumped, with Ether rising 13% and Dogecoin up 11%, driven by broader enthusiasm and bullish sentiment from institutional forecasts.

FX Today:

  • EUR/USD Falls Below 1.1300 as Correction Deepens: EUR/USD declined 0.64% to close at 1.1227, slipping below the key 1.1300 psychological level as the pair continued its pullback from April’s 1.1600 peak. Despite the move lower, the broader uptrend remains intact, with the 50-day SMA at 1.1043 and both the 100-day and 200-day SMAs trending higher. The drop appears to be a corrective phase following a strong rally from late March. Initial support lies near 1.1200, with stronger backing around the 50-day average. Resistance now stands at 1.1300 and then 1.1450, levels that previously capped upside attempts. Unless price breaks below the 1.1000 threshold, bulls are expected to remain in control. 
  • GBP/USD Slips Despite Trade Breakthrough and Hawkish BoE Cut: GBP/USD closed at 1.3246, down 0.34%, after failing to hold session highs of 1.3356. The pair initially rallied following the announcement of a US-UK trade framework and a 25bp BoE rate cut, which was interpreted as hawkish due to a divided vote among policymakers. However, profit-taking emerged near resistance around 1.3350, pulling the pair lower toward support near 1.3200. All major moving averages remain supportive of a broader uptrend, with the 50-day at 1.3059 and longer-term SMAs trending upward. Price action suggests near-term consolidation under resistance at 1.3450. A breakout above that level would signal renewed bullish strength, with a potential upside target at 1.3600. For now, the bias remains upward as long as price holds above 1.3050.
  • USD/CAD Extends Rebound Toward 200-Day SMA: USD/CAD advanced 0.62% to settle at 1.3923, pushing closer to the 200-day SMA at 1.4001. The pair has rebounded strongly from recent lows near 1.3730, where a base appears to have formed. While the short-term momentum has turned positive, the broader trend remains under pressure with the 50-day and 100-day SMAs still sloping downward. A clean break above the 200-day SMA could attract further buying interest and open the door to test resistance around 1.4120. However, failure to clear 1.4000 may see the pair slip back toward initial support at 1.3820 and 1.3750. 
  • USD/CHF Bounces Above 0.8300 But Remains in Downtrend: USD/CHF gained 0.92% to close at 0.8310, recovering from multi-year lows and attempting to build a base above the 0.8200 level. The pair has been locked in a tight consolidation zone after a sharp April decline, and is now testing resistance at 0.8330. Despite the recent rebound, the overall trend remains bearish, with the 50-day, 100-day, and 200-day SMAs, at 0.8548, 0.8800, and 0.8722 respectively, all trending lower and positioned well above the current price. A breakout above 0.8550 would be needed to suggest a meaningful shift in trend. Until then, the recovery appears to be a bear-market bounce. Support remains firm near 0.8200, with a deeper floor at 0.8050. 
  • USD/JPY Surges Toward 146 as Bulls Regain Momentum: USD/JPY rallied 1.42% to close at 145.86, extending its recovery from April’s lows near 140.00. The pair has now rallied for three consecutive sessions, with price action accelerating as it approaches the falling 50-day SMA at 146.42. Higher lows since late April have shifted sentiment bullish in the short term. Above the 50-day, resistance looms at 147.00–148.00, a zone that previously acted as support. The broader trend remains under downward pressure with the 100-day and 200-day SMAs still declining, but the short-term outlook has improved. Support is seen at 144.00 and deeper at 142.50. A break above the 50-day SMA could invite additional upside momentum toward the key 150.00 psychological barrier.
  • Gold Retreats Sharply After Failing to Hold $3,400 Level: Gold (XAU/USD) fell 1.72% to close at $3,307, extending its pullback from the $3,440–$3,450 resistance area that capped price in April. The move follows a strong prior rally, and while sharp, it appears to be corrective rather than a full reversal. Price remains above all major moving averages, with the 50-day at $3,121 and the 200-day at $2,771. Short-term support lies near $3,250 and $3,200, while a confirmed break below $3,100 would undermine the bullish case. If bulls can stabilise around current levels, a fresh push toward $3,400 remains possible. However, failure to hold above $3,250 could invite deeper retracement toward the 50-day SMA.

Market Movers:

  • AppLovin Surges on Earnings Beat and Divestiture News: AppLovin jumped 11.9% after beating Q1 estimates and announcing the $400 million sale of its mobile gaming business. 
  • Carvana Jumps on Strong Q1 Results: Carvana rose 10.2% as revenue, retail units, and margins all exceeded expectations. 
  • Arm Holdings Drops on Weak Guidance: Shares fell 6.2% despite a solid Q4 beat, as the chip designer issued disappointing guidance. 
  • Cleveland-Cliffs Plunges on Q1 Miss: The stock dropped 15.8% after missing EPS and revenue estimates. Steel demand weakened and costs rose. Guidance pointed to continued volatility.
  • Fortinet Falls on Weak Outlook: Fortinet slid 8.4% after issuing soft full-year EPS guidance. Despite solid Q1 results, spending concerns weighed.
  • Crocs Pops on Earnings Beat, Pulls Guidance: Crocs rose 9.8% on strong Q1 results. However, it withdrew full-year guidance citing trade uncertainty. Investors focused on solid execution.

Markets ended Thursday on a firmer footing as investors welcomed signs of progress in global trade negotiations, particularly the outline of a US-UK deal. A rate cut from the Bank of England and renewed optimism around US-China talks helped lift sentiment across asset classes, while strong tech earnings and a rebound in cryptocurrencies added to the risk-on tone. Despite some caution around inflationary data and lingering policy uncertainty, the session marked a notable shift toward growth expectations. Traders will now turn their focus to upcoming meetings in Switzerland and additional macro data releases for indications on the path ahead.