Tariff relief for sale — Price tag? Buy American

Trump’s deal lights a fire under Wall Street

Wall Street caught a full-blown risk-on fever Thursday as President Trump unveiled the first post-Liberation Day trade deal-with the U.K., no less-sending equities screaming higher, bonds to the mat, and traders scrambling for upside exposure. The Dow punched out of correction territory like a heavyweight catching its second wind, while the S&P 500 rode a wave of transatlantic optimism, fueled by a fresh blast of political oxygen.

For a market that’s been begging for daylight at the end of the tariff tunnel, this deal was more than symbolic-it was a breakthrough. The agreement doesn’t just adjust steel and aluminum tariffs or halve auto levies on the first 100k British cars; it rewires the geopolitical narrative. It marks Trump’s first pivot toward a realigned global supply chain-one where tariffs fall if you "Buy America" and play nice.

The U.K. gets ethanol, beef, and machinery access; the U.S. bags $10 billion in Boeing parts and locks in pharma supply chain security. Call it what it is: a handshake deal with teeth. It’s tariff relief for loyalty, access in exchange for alignment. A transactional blueprint that rewards allies willing to buy American-and sends a quiet but firm message to the rest: deals are there for the taking if you come to the table.

The street got the memo-fast. Trump literally told investors to “go buy stocks now,” and they did. The S&P 500 popped.

In FX land, and right on cue, USDJPY ripped to 146 as the U.S. 10-year yield punched 12 bps higher, while EUR/USD sliced through the 1.1260 floor like a hot knife through butter. Classic flow-chasing mechanics-this was a stretched-position unwind fueled by optics, momentum, and a rare flash of policy clarity. It was textbook: yields up, dollar bid, and the tape rewarding alignment over ambiguity.

But let’s not confuse velocity with sustainability. The easy money’s likely been made in FX this week. The breakout was fueled by an unwind of the negative risk premium that’s been dragging the dollar-baggage born from trade war uncertainty that’s finally starting to lift. With that weight off, the dollar is trading more in line with rates and macro correlations. Still, for this move to stick, traders will need to see more follow-through-especially as ASEAN trade deals begin to take shape. Without that, positioning could stall, and the tape may shift from breakout to digestion mode.

If Trump can line up back-to-back-to-back bilateral wins while Beijing sits on a pile of overcapacity and soft PMIs, the market will keep bidding the dollar, loading up U.S. assets, and rotating back into the US markets faster than Brussels can type up another retaliatory tariff memo.

Thursday was a statement-not just to markets, but to the world. Tariffs come down when deals get done. And deals get done when you play by “fair trade” rules. Markets got the signal loud and clear.

Now let’s see who will be the next to blink and reach for the ink.

Oil rips as tariff tailwinds kick

Crude caught a solid bid Thursday, with WTI up over 3% and Brent not far behind, as traders front-ran what’s shaping up to be the next phase of tariff diplomacy. Momentum was driven by renewed optimism ahead of next week’s U.S.-China trade talks, where Treasury Secretary Bessent is set to sit down with Beijing’s top economic brass in Switzerland. The oil market read that for what it is: a thaw in the making between the world’s two largest crude consumers.

But this isn’t your typical supply-demand story-it’s all about optics and alignment. Trump’s breakthrough deal with the U.K. earlier in the session injected fresh risk appetite into commodities across the board, and oil rode the wave. Sure, the 10% baseline U.S. tariff stays, but Britain’s move to slash its own import barriers and ramp up access to American goods sends a broader message: buy from the U.S., and you get a seat at the table.

It’s not strategic decoupling-it’s pragmatic realignment. Trade flows are being rerouted, not severed. Energy deals are becoming the diplomatic currency of choice.

That sentiment shift layered nicely over a market still wrestling with conflicting supply signals. OPEC+ is nudging output higher, but real barrels from Venezuela, Iraq, and Libya are still missing in action.

The next real directional break for crude won’t be about OPEC quotas or U.S. rig counts-it’s going to come down to the Iran optics.

Right now, the market’s holding its breath. U.S. sanctions on Chinese teapots for skirting Iranian crude restrictions are already causing logistical whiplash-workarounds, product rebrands, and murky ship-to-ship transfers. It's a full-blown gray-market shuffle, injecting headline volatility into a tape that’s already jumpy from policy risk. But that’s just the noise.

The real signal is this: if there’s a U.S.-Iran nuclear deal, it’s lights out for oil bulls in the short term. You’ll see supply ramp headlines faster than algos can price it in, and Brent could easily collapse toward the $50 handle. That’s the deflationary scenario-more barrels, less bid, curve flattening in a hurry.

But if talks stall-or worse, blow up-then we’re looking at an asymmetric upside break. A breakdown in diplomacy could shut down any remaining Iranian flow under the radar, pull China further into enforcement crosshairs, and tighten balances faster than expected. Suddenly, $70 oil isn't a stretch-it's base case. Risk premia would spike, backwardation would steepen, and hedging flows would flood the front of the curve.

This is the tail that’s wagging the barrel. Iran is the last true wildcard left in the crude complex-a binary risk that could swing price bands by $15–20 in either direction, depending on whether diplomacy holds or fractures.

So while the market plays the waiting game with OPEC and watches U.S. shale’s slow-motion return or burn, depending on price level, smart money knows the real trade is in Tehran. Crude’s next directional impulse won’t come from Vienna-it’ll come from whether the White House picks détente or deterrence.

The view

The bearish consensus just got steamrolled

Markets came in heavy with baggage-sentiment in the gutter, bearishness running hotter than a Vegas blackjack table on free-drink night. But like clockwork, Trump rolled out his favourite stimulus lever: the tweet. “Buy stocks now,” he said-and the tape obliged with the kind of vertical lift that makes bears weep and momentum traders foam at the keys.

Big tech led the charge, Bitcoin cracked $101K like it had a score to settle with gravity, and small caps went full nitro-up 6% off the lows in a short-squeeze rally straight out of the playbook. Risk was on. Bonds got pancaked. Gold got slapped. Crypto lit up like it was 2021. The dollar surged back to one-week highs as the tape blew past its own pessimism.

And here’s the kicker: despite all that upside action, investor sentiment still hasn’t flipped. We’re 11 weeks deep in >50% bearish AAII prints. The last record was seven. This isn’t just cautious-it’s biblical-level disbelief. Which begs the question: if everyone's bearish, who’s buying?

Answer: systematics-they’ve scooped $100 billion in global equities over the last 10 days while everyone else stared at their recession Google alerts. And if everyone’s already positioned for a selloff, guess what’s not coming?

The breakout wasn’t just a knee-jerk. Trump’s UK trade deal lit the fuse. Easing chip rules, Boeing orders, tax incentives, and talk of more tariff-skirting deals with ASEAN and Japan have Wall Street sniffing the return of pro-growth nationalism. This isn’t strategic decoupling-it’s deal-driven realignment, where tariffs fall for friends and flows follow the flag.

Treasuries were clubbed like baby seals. Yields screamed higher across the curve-2s up 13 bps, 5s punched back to 4.00%. That’s not fear-that’s reflation. Rate-cut odds for 2025 dropped below pre-Liberation Day levels. The Fed’s not on deck anymore-the market is pricing in a world where fiscal does the lifting, not monetary.

Mag7 stocks outperformed (again), putting in a +2% day versus +1% for the S&P ex-tech. And Bitcoin? Well, BTC is now the canary, the rotation magnet, and the anti-everything trade all rolled into one-outperforming gold hard and reminding everyone what happens when risk appetite returns with a vengeance.

Oil tagged $60, recapturing yesterday’s losses and riding the coattails of risk flows and trade optimism. Gold, meanwhile, was dumped twice, dragged back down to $3,300 as hedges got unwound.

Still, late-day sellers showed up, shaving the froth after headlines around possible Trump tax hikes for high earners and Powell-bashing from VP Vance. Stocks closed off their highs, but not before reminding the street who’s in charge when sentiment’s this offside.

If you’re bearish, congrats-you’re the herd. But herds don’t move markets. Flow does. And right now, the flow is coming from places that aren’t worried about sentiment surveys or recession Google spikes. This tape is running on policy momentum, positioning pain, and a President who knows exactly how to juice the bid.

Buy the dips? Maybe. Fade the melt-up? Dangerous. Until the next deal misses or the rhetoric rolls back, this squeeze isn’t done-it’s just catching its breath.