Global stocks surged to all-time highs on Friday after US President Donald Trump reportedly offered to scrap tariffs on Chinese goods set to go live Sunday and slash existing tariffs, and Prime Minister Boris Johnson’s Conservatives achieved a landslide victory in the UK’s general election.
The MSCI index of developed and emerging world equity markets touched an all-time high Friday. In the US, the S&P 500 and the Nasdaq indexes closed at record levels on Thursday, and futures signaled stocks were set to rally again at Friday’s market open.
Britain’s FTSE 250 of domestically exposed stocks hit a new high Friday, and the Euro Stoxx 600 reached an intraday record.
Domestic-focused UK stocks including Royal Bank of Scotland, Lloyds Banking Group, and easyJet all rallied by 10% or more. The British pound rose by 1.8% against the US dollar to $1.34.
On Thursday, Trump signed off on roughly halving tariffs on $360 billion of Chinese goods, and suspending a planned expansion of duties to $160 billion worth of other Chinese goods, as part of a potential trade deal with China, according to the Wall Street Journal. Under the agreement, China would purchase $50 billion worth of US agricultural goods and other American products next year.
Also Thursday, the Tories won at least 364 seats in the House of Commons, surpassing the 326 needed for a majority and paving the way for Britain to leave the European Union.
“Some investors will see today as Christmas come early, as we see a convergence of two critical political risks coming to some resolve,” Dean Turner, an economist at UBS Wealth Management, said in an email. “Indications of a strong electoral outcome in the UK and developments towards a Phase 1 US-China trade deal have lifted the mood in the markets.”
Here’s the market roundup as of 12 p.m. in London (7 a.m. in New York).
US stocks were set to rise, with futures underlying the S&P 500 and the Dow Jones Industrial Average up 0.4% and Nasdaq futures up 0.5%.
Asian equities climbed, with China’s Shanghai Composite up 1.8%, Hong Kong’s Hang Seng up 2.6%, and Japan’s Nikkei up 2.6%.
European markets were jumping, with Germany’s DAX up 1.3% and the Euro Stoxx 50 up 1.34%.
Oil prices climbed, with West Texas Intermediate up 1.2% at about $59.90 a barrel and Brent crude up 1.5% at $65.20.