Midday Market Roundup for Thursday, May 8, 2025

Good afternoon. Here are the top four global financial and economic topics shaping markets at midday, Thursday, May 8, 2025:

1. U.S. Markets Rally on U.K. Trade Deal and Tariff Optimism

Wall Street surged Thursday after President Trump announced a trade deal framework with the United Kingdom and suggested that tariffs on China could be reduced if talks progress. The S&P 500 rose 0.4%, the Nasdaq 100 gained 0.6%, and the Dow Jones Industrial Average climbed 0.4% by late morning. Nearly all major sectors advanced, with economically sensitive and small-cap stocks leading the gains. President Trump’s comments encouraged investors to buy stocks, fueling a “risk-on” rally and reversing some of the anxiety seen in recent weeks over global trade tensions146.

2. Federal Reserve Holds Rates Steady, Flags Rising Uncertainty

As expected, the Federal Reserve kept its benchmark interest rate unchanged at 4.25%–4.5% following its May meeting. In its statement, the Fed noted that “uncertainty regarding the economic outlook has intensified,” with heightened risks of rising unemployment and persistent inflation. Chair Jerome Powell ruled out a preemptive rate cut to counteract tariff effects, emphasizing the need for more data before adjusting policy. Markets now see a lower probability of a rate cut in June, with the Fed signaling it will remain cautious amid conflicting economic signals179101112.

3. Global Markets Lifted by Trade Progress and Central Bank Moves

European and Asian equities advanced on optimism over U.S. trade deals and central bank actions. The Stoxx Europe 600 and FTSE futures rose, while Japan’s Nikkei and Chinese blue chips also gained. The Bank of England cut its main interest rate by 0.25 percentage points to support growth as tariffs threaten the global outlook. Bond yields fell, and the dollar held recent gains as investors recalibrated expectations for further central bank easing56.

4. Investors Eye Economic Data and Fed Outlook

Investors closely watch new economic data, including weekly U.S. jobless claims and upcoming inflation reports, for further clues on growth and the Fed’s next steps. While the labor market remains resilient-with unemployment steady at 4.2% and nonfarm payrolls up 177,000 in April-business confidence is fragile. The Fed’s dual mandate risks are now “pulling in conflicting directions,” with markets bracing for more volatility if trade talks falter or inflation accelerates1791112.

Sources

• CNBC: https://www.cnbc.com/2025/05/07/stock-market-today-live-updates.html
• Bloomberg: https://www.bloomberg.com/news/articles/2025-05-07/stock-market-today-dow-s-p-live-updates
• Reuters: https://www.reuters.com/markets/global-markets-wrapup-1-2025-05-08/
• Federal Reserve: https://www.federalreserve.gov/newsevents/pressreleases/monetary20250507a.htm
• CNN: https://www.cnn.com/2025/05/08/economy/bank-of-england-rate-cut-tariffs-intl
• CBS News: https://www.cbsnews.com/news/fed-meeting-decision-today-fomc-interest-rates-may-2025/
• Yahoo Finance: https://finance.yahoo.com/news/live/stock-market-today-dow-sp-500-nasdaq-slide-ahead-of-fed-decision-as-tariff-fears-reemerge-133142960.html

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