Stocks rise after Trump announces trade deal between the U.S. and U.K.

Stocks surged on Thursday following the announcement of a new trade agreement between President Trump and the United Kingdom. The S&P 500 saw a gain of 55 points, or 1%, reaching 5,686, while the Dow Jones Industrial Average rose by 408 points, or 1%, to 41,523. The Nasdaq Composite also experienced a 1.3% increase.

President Trump revealed the details of the trade deal with the United Kingdom from the Oval Office, highlighting the inclusion of “billions of dollars of increased market access for American exports, especially in agriculture.” He emphasized that the U.K. will eliminate non-tariff barriers that have unfairly discriminated against American products.

Despite the positive news, the 10% baseline U.S. tax on imports from Britain and other countries, which was imposed in April by the Trump administration, will remain in place. However, under the new plan, the first 100,000 vehicles exported to the U.S. from British automakers each year will be subject to the 10% rate, with additional vehicles facing a higher 25% rate.

Commerce Secretary Howard Lutnick highlighted during a White House briefing that the U.S. will still benefit from a 10% tariff, generating $6 billion in revenue for the country.

The U.S.-U.K. trade deal comes at a time when the global market is navigating through uncertainty. While the agreement is a positive development, investors should brace themselves for potential volatility in the market, according to Solita Marcelli, Chief Investment Officer Americas at UBS Global Wealth Management.

The focus now shifts to other trading partners, including China, where negotiations are ongoing. China has urged the U.S. to cancel its tariffs ahead of talks between Treasury Secretary Scott Bessent and a high-level Chinese delegation this weekend. President Trump has stood firm on maintaining tariffs on Chinese goods, signaling a challenging road ahead in negotiations.

In light of the unpredictable trade policies, the Federal Reserve announced on Wednesday that it would maintain its benchmark interest rate within the current range of 4.25% to 4.5%.

The Associated Press contributed to this report.

Mary Cunningham is a reporter for CBS MoneyWatch with previous experience at “60 Minutes,” CBSNews.com, and CBS News 24/7 as part of the CBS News Associate Program.