Stocks looked set to close the week in the green after President Donald Trump said the U.S. and China had signed a trade deal, bolstering hopes that a flurry of similar agreements would come before Washington’s July 9 deadline for reimposing tariffs.
Futures tracking the Dow Jones Industrial Average were up 145 points, or 0.3%. S&P 500 futures rose 0.3% and contracts tied to the tech-heavy Nasdaq 100 gained 0.4%, with both indexes on the brink of setting record highs.
A week can be a long time in markets, and that’s been the case over the past few trading sessions, with investors’ focus shifting back to tariffs and Federal Reserve interest-rate cuts after the cease-fire between Iran and Israel eased fears that the crisis in the Middle East would spark a surge in oil prices.
“We just signed with China yesterday,” Trump said late Thursday at an event promoting his signature tax bill, without providing further details. China’s Ministry of Commerce said in a statement early Friday that Beijing and Washington had both confirmed the details of the trade framework they agreed in London earlier this month.
Investors will be hoping more deals will follow, although there’s less urgency given the White House has played down the importance of the July 9 cut-off date. “The deadline is not critical,” White Press press secretary Karoline Leavitt said in a press briefing Thursday.
The market could also get more clarity on where interest rates are headed Friday given that the Federal Reserve’s preferred inflation gauge, the personal consumption expenditures index, is due out. Headline PCE is expected to have risen 2.3% year over year in May and just 0.1% month over month, according to FactSet consensus data. That would mark the third straight month of tame inflation readings—a trend Fed officials have pointed to as evidence that price pressures are moving closer to target.
“We seem to be in a sweet spot post Middle Eastern calm and pre the July 9th reciprocal tariff extension deadline,” Deutsche Bank strategist Jim Reid said in a research note. “This will start to come into view soon, and headlines are starting to bubble up.”
Gold slumped 1.5% to $3,299 an ounce Friday, as the positive headlines on trade led to investors pivoting away from safe-haven assets.
The yield on the benchmark 10-year Treasury note rose 4 basis points to 4.28%, and a gauge of U.S. dollar strength was up 0.1%, a day after the greenback sank to a three-year low against its peers.
