London, United Kingdom — European markets opened positively on Friday, buoyed by the announcement of a new trade agreement between the United Kingdom and the United States. Investors are also eyeing upcoming trade talks between the U.S. and China, set to begin this weekend.
By 9:41 a.m. local time, the pan-European Stoxx Europe 600 index had risen by 0.4%. The U.K.’s FTSE 100 climbed 0.4%, while Germany’s DAX and France’s CAC 40 each saw gains of over 0.5%. In contrast, the FTSE 100 experienced a setback on Thursday, falling 0.32% after ending a record winning streak the day before.
Market watchers are particularly focused on the weekend negotiations involving U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer, who will engage with senior Chinese officials in Switzerland. These discussions aim to address both economic and trade issues, with Bessent emphasizing that the goal is de-escalation rather than reaching a comprehensive trade deal.
The backdrop for these talks is an ongoing trade war that has seen both nations impose punitive tariffs on a wide range of goods. Recent events ramped up tensions, making the outcome of the weekend negotiations crucial for global market stability.
The freshly minted agreement with the U.K. represents a significant development, marking the first formal trade deal since the introduction of the Trump administration’s reciprocal tariffs system last month. Under the terms, the U.K. is permitted to export up to 100,000 vehicles to the U.S. at a reduced tariff of 10%, with additional vehicles subjected to a 25% duty. Additionally, British steel and aluminum exporters will enjoy tariff-free access to the American market, a notable decrease from the previous 25% tariff implemented in February. However, most other U.K. goods imported to the U.S. will remain subject to a 10% baseline tariff.
As the European markets process this new trade landscape, investors are also awaiting financial results from key regional players. Commerzbank, a major German bank, is releasing its earnings, while Portugal’s utility company EDP is set to disclose quarterly results following a significant power outage earlier in the month.
Meanwhile, the mixed performance in Asia-Pacific markets reflects uncertainty as investors analyze China’s trade data from April. Despite the challenges posed by U.S. tariffs, Chinese exports saw a notable increase while imports showed a smaller decline, coinciding with Beijing’s efforts to stimulate its economy.
Across the Atlantic, Wall Street futures indicate a cautious approach, with Dow Jones Industrial Average futures down 52 points, or 0.1%. The Nasdaq 100 and S&P 500 futures also posted slight decreases, suggesting a potential pause as traders await further developments on trade discussions and corporate earnings.