S&P 500 Near Record as Trump-Xi Tariff Deal Lifts Risk

The S&P 500 hovered near record highs after Donald Trump said he struck a deal with Xi Jinping to reduce US-China tariffs in exchange for resumed soybean purchases and rare earth exports. Optimism over easing trade tensions kept Chinese equities near decade highs, though markets traded choppily amid limited details from Beijing. Meanwhile, the Fed cut rates as expected while Powell signaled a pause ahead, and the Bank of Japan held steady but hinted at a possible December hike.

Equities

The FTSE 100 closed 0.6% higher on Wednesday, setting a fresh record for the fifth consecutive session and extending its winning streak to eight trading days. Gains were driven by upbeat corporate news across healthcare, retail and mining.

GSK rose 6.5% after the drugmaker raised its 2025 sales and earnings forecasts, citing stronger-than-expected demand for its cancer and HIV medicines. The update also lifted the wider healthcare index by more than 2%. Retailer Next gained 8.7% to a record high after it upgraded its full-year profit guidance for the fourth time this year, supported by robust international sales and increased digital marketing investment.

Miner and trader Glencore climbed 5.6% as it reported a rise in third-quarter copper production, pushing the industrial metals and mining index 3.3% higher. Gold miner Fresnillo also advanced 5% after Peel Hunt lifted its price target to 1,954 pence. A weaker pound added further support to the internationally exposed benchmark.

The Bank of England reported that lenders approved more mortgages in September than in any other month this year, suggesting steady housing demand ahead of the government’s budget announcement next month.

In the United States, trading on Wednesday was mixed following the Federal Reserve’s decision to cut interest rates by 25 basis points to a target range of 3.75%–4.00%. The Dow Jones Industrial Average fell 0.2% to 47,632, while the S&P 500 was flat at 6,890.59 and the Nasdaq Composite added 0.6% to a record 23,958.47. The Fed said it would restart limited Treasury purchases, but Chair Jerome Powell indicated that another rate cut in December was “far from assured”.

Nvidia gained 3% to $207.04, becoming the first company to reach a $5 trillion market value, helped by continued demand for artificial intelligence chips. Caterpillar jumped 11.6% after reporting third-quarter profits ahead of expectations. After-hours results saw mixed trading among technology giants: Meta Platforms fell more than 8% after taking a $16 billion one-off charge and warning of higher 2026 spending; Microsoft slipped 1% amid record AI infrastructure costs; and Alphabet climbed about 5% on strong AI-related revenues.

Forex & Commodities

The yen weakened sharply after the Bank of Japan kept rates unchanged at 0.5% and offered little clarity on when it might next raise borrowing costs. The Japanese currency fell to ¥153.52 against the dollar, an eight-and-a-half-month low, and touched a record low of ¥178.4 versus the euro. Sterling strengthened modestly to ¥202.5 but remained subdued against the dollar at $1.3208. The euro edged up to $1.1620, while the dollar index eased to 99.10 after touching a two-week high overnight, reflecting a mixed response to the US Federal Reserve’s latest policy decision. The Fed cut rates by 25 basis points to a 3.75–4.00% range on Wednesday but indicated that another reduction this year is uncertain amid a lack of government data caused by the ongoing shutdown.

Gold prices rose on Thursday morning as the dollar softened, with spot gold up to $3,964 per ounce. Traders cited short-term technical support following the Fed’s rate cut, even as reduced expectations for a December move limited gains. Silver, platinum and palladium also rose modestly, reflecting broader interest in precious metals after the US–China tariff announcement.

Oil prices eased slightly in early trade despite President Donald Trump confirming a tariff cut on Chinese imports to 47% from 57% after his meeting with President Xi Jinping in South Korea. Brent crude slipped to $64.72 per barrel, while US West Texas Intermediate traded at $60.28. Data from the Energy Information Administration showed US crude inventories falling by 6.86 million barrels last week, far above forecasts. Markets now turn their attention to the November OPEC+ meeting, where members are expected to confirm an additional supply increase of 137,000 barrels per day for December.