• US-UK trade deal reduces tariffs on US goods
• Boeing gains after UK to buy planes worth $10 billion
• Arm slides after bleak Q1 revenue forecast
• Indexes up: Dow 0.62%, S&P 500 0.58%, Nasdaq 1.07%

NEW YORK, May 8 (Reuters) - U.S. stocks rose on Thursday as investors cheered a new trade agreement hammered out between the United States and Britain, while U.S. President Donald Trump signaled upcoming talks with China would be more substantial than initially thought.

Britain agreed to lower its tariffs to 1.8% from 5.1% and provide greater access to U.S. goods as part of the deal, while a 10% baseline tariff on goods imported from the UK into the U.S. remains in place.

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Airline stocks shot higher after the U.S.-UK agreement exempted plane parts made by Rolls-Royce (RR.L) , opens new tab from tariffs, with the S&P 500 passenger airlines index (.SPLRCALI) , opens new tab closing up 5.4%, led by a 7.2% surge in Delta Air Lines (DAL.N) , opens new tab.

U.S. Commerce Secretary Howard Lutnick said the UK would buy $10 billion of Boeing (BA.N) , opens new tab aircraft, sending the planemaker's shares 3.3% higher as the best performer on the Dow.

Trump also said he expects substantive negotiations between the U.S. and Beijing on the trade front this weekend and wouldn't be surprised if a deal was reached.

"It did respond positively today to the announcement with the UK. Trump's a showman, and so when he said that those talks this weekend in Geneva are going to be substantive, you have to take him at his word, but you never know," said Scott Welch, chief investment officer at Certuity in Potomac, Maryland.

"The market is looking for an excuse to exhale and believe that we're going to get to a more reasonable outcome here than just an all-out global trade war."

The Dow Jones Industrial Average (.DJI) , opens new tab rose 254.48 points, or 0.62%, to 41,368.45, the S&P 500 (.SPX) , opens new tab gained 32.66 points, or 0.58%, to 5,663.94 and the Nasdaq Composite (.IXIC) , opens new tab gained 189.98 points, or 1.07%, to 17,928.14.

On the sector level, consumer discretionary (.SPLRCD) , opens new tab, industrials (.SPLRCI) , opens new tab and energy (.SPNY) , opens new tab were the best performers while healthcare (.SPXHC) , opens new tab and utilities (.SPLRCU) , opens new tab were the laggards.

The domestically focused Russell 2000 small-cap index (.RUT) , opens new tab rose 1.9% to close at its highest level since April 2, the day the tariffs were initially announced.

Semiconductor stocks (.SOX) , opens new tab ended 1% higher, building on the 1.7% rise in the prior session after a spokesperson said the Trump administration was planning to rescind and modify a rule that curbed the export of sophisticated artificial-intelligence chips.

The U.S. Federal Reserve held interest rates steady on Wednesday and flagged heightened risks of inflation and unemployment, further clouding the economic outlook for the world's largest economy.

Markets still see the first cut of at least 25 basis points from the Fed at its July meeting, although expectations have dipped to 60% from 92% a week ago, according to CME's FedWatch Tool , opens new tab.

On the economic front, weekly initial jobless claims fell more than expected last week, suggesting for some analysts the labor market remains on stable footing, but a separate report showed worker productivity dropped in the first quarter for the first time in nearly three years.

Among others, U.S.-listed shares of Arm slumped 6.2% after the chipmaker forecast first-quarter revenue and profit below Wall Street estimates.

Tapestry (TPR.N) , opens new tab rose 3.7% after the luxury group raised its annual forecasts while Krispy Kreme's (DNUT.O) , opens new tab shares plummeted 24.7% after the restaurant chain became the latest to withdraw its full-year forecast.

Advancing issues outnumbered decliners by a 1.82-to-1 ratio on the NYSE, and by a 2.15-to-1 ratio on the Nasdaq.

The S&P 500 posted 18 new 52-week highs and five new lows, while the Nasdaq Composite recorded 58 new highs and 98 new lows.

Volume on U.S. exchanges was 16.85 billion shares, compared with the 16.86 billion average for the full session over the last 20 trading days.

https://www.reuters.com/business/us-stock-futures-climb-hopes-first-trade-deal-since-tariff-pause-2025-05-08/