European Stocks Climb on Optimism Over U.S.-U.K. Trade Deal and Easing Tensions

European equity markets rose on Friday, buoyed by optimism that the newly signed trade framework between the United States and the United Kingdom could serve as a model for future agreements, potentially easing global trade tensions.

At 03:10 ET (07:10 GMT), the DAX in Germany and the CAC 40 in France each gained 0.7%, while the FTSE 100 in London rose 0.4%.

U.K. Trade Deal Sparks Broader Optimism

The U.S. signed a trade framework agreement with the United Kingdom on Thursday, under which the 10% tariff on British imports remains in place. However, the U.K. agreed to reduce its tariffs to 1.8% from 5.1%, and steel and aluminum exports to the U.S. will now be exempt from the 25% levies imposed under former tariff policies.

U.S. Commerce Secretary Howard Lutnick signaled in follow-up comments that the U.S. is preparing “dozens” of similar trade deals, though a universal 10% tariff is expected to remain in place as a baseline. The news has lifted investor sentiment ahead of scheduled U.S.-China trade talks this weekend.

China Trade Data Surprises to the Upside

Chinese trade data released Friday offered further support to global equities. Exports rose 8.1% year-on-year in April, beating expectations, as foreign buyers rushed to secure goods ahead of the expiration of U.S. President Donald Trump’s 90-day tariff pause. Imports dipped by 0.2%, suggesting some resilience in domestic demand as Beijing continues to stimulate its $19 trillion economy.

Corporate Earnings Continue to Surprise

In the corporate sphere, Commerzbank (ETR:CBKG) reported a 12% rise in first-quarter net profit, defying analyst forecasts of a decline. The solid performance may strengthen the German bank’s defense against a potential takeover bid from Italy’s UniCredit.

Mediobanca (OTC:MDIBY) posted a €1 billion net profit for the first nine months of its fiscal year, supported by strong revenue growth and capital generation. Meanwhile, Norwegian investment firm Aker (OL:AKER) reported a robust quarterly profit, driven by gains from asset sales and dividend flows.

Oil Prices Extend Gains on Trade Optimism

Crude prices continued to advance on Friday, extending gains from the prior session as easing trade tensions lifted demand expectations. At 03:10 ET, Brent crude futures rose 0.8% to $63.32 per barrel, while West Texas Intermediate (WTI) gained 0.8% to $60.38 per barrel. Both benchmarks settled nearly 3% higher on Thursday.

The oil market has been particularly sensitive to trade developments given that both the U.S. and China are among the world’s largest crude consumers. Hopes that the U.K. deal signals a broader shift in the Trump administration’s trade strategy—particularly toward major importers like China and India—have provided tailwinds for prices.

Outlook

While Friday’s gains reflect cautious optimism, investors remain attuned to developments over the weekend, especially the outcome of the U.S.-China trade talks. Any signs of a breakthrough or roadmap to further de-escalation could reinforce risk appetite into next week. However, markets are also mindful of lingering geopolitical tensions and the potential for volatility in commodities and currencies as trade policy remains in flux.