Today’s Market ActionMajor Indexes Post Significant Gains as Trade Tensions Ease
US stock markets rallied significantly on Thursday, May 8, 2025, as investors celebrated a newly announced trade agreement between the United States and the United Kingdom. The major indexes all posted substantial gains, with technology stocks leading the advance after the Trump administration indicated plans to rescind some Biden-era restrictions on semiconductor exports.
The Dow Jones Industrial Average jumped 500 points (approximately 1.2%), building on yesterday’s gain of 284.97 points. The S&P 500 climbed about 1.1%, while the tech-heavy Nasdaq Composite surged 1.4%, rebounding strongly from recent losses.
Trade Deal and Policy Changes Boost Market Sentiment
President Donald Trump announced early Thursday that “The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.” This news provided significant relief to markets that have been concerned about global trade tensions since Trump’s tariff announcements last month.
Adding to the positive sentiment, the administration plans to rescind some restrictions regulating the export of semiconductors to various countries, benefiting major chip manufacturers. Intel Corporation (INTC) rose more than 3% in premarket trading, while Nvidia Corporation (NVDA) and Micron Technology (MU) also posted significant gains.
Fed Holds Rates Steady Amid Economic Uncertainty
The market rally follows Wednesday’s Federal Reserve decision to maintain its key interest rate in the 4.25%-4.5% range, where it has remained since December. Fed Chair Jerome Powell noted increased economic uncertainty but ruled out preemptive rate cuts despite concerns about Trump’s tariff policies.
“The economy has been resilient. It’s doing fairly well. Our policy is well positioned. The costs of waiting to see further are fairly low,” Powell stated during his press conference.
Tech Sector Leads the Way
Technology stocks were the day’s standout performers. Microsoft (MSFT) gained 2.8%, continuing its momentum after recently beating Wall Street’s expectations for its fiscal third quarter. The company reported earnings of $3.46 per share on sales of $70.07 billion, significantly above analyst projections.
Tesla (TSLA) shares climbed 3.8% as the electric vehicle manufacturer attempts to recover from its recent earnings disappointment. The company had reported a 40% drop in Q1 earnings per share and a 9% decline in revenue compared to the previous year.
Meta Platforms (META) advanced 2%, while Amazon (AMZN) gained 1.1% despite ongoing concerns about the potential impact of tariffs on its e-commerce business.
Upcoming Earnings and Market Events
Several major companies reported earnings before today’s market open, including Shopify (SHOP), ConocoPhillips (COP), and Warner Bros. Discovery (WBD). Shopify was expected to report a 41.67% increase in earnings per share compared to the same quarter last year.
Investors are also closely monitoring the used vehicle market, where prices have reached their highest level since October 2023. The Manheim Used Vehicle Value Index is up 4.9% from a year ago and 2.7% from March, as consumers rush to buy cars amid concerns about potential tariff impacts.
Looking Ahead
Market participants will be watching tomorrow’s news conference at 10 a.m. where details of the UK trade deal will be announced. Additionally, Nintendo’s forecast of selling 15 million Switch 2 consoles in the fiscal year ending March 2026 will be scrutinized for potential tariff impacts, as the new hardware is set to launch in June at $449.99 in the U.S.
With trade tensions easing and positive developments in the tech sector, market sentiment appears to be improving despite ongoing economic uncertainties. Investors remain cautious but optimistic as they navigate the evolving policy landscape.