Wall Street opened higher on Thursday as traders shrugged off president Donald Trump declaring that the US was now locked in a trade war with China, amidst the ongoing government shutdown.

The FTSE 100 (^FTSE) and European stocks were mixed on Thursday, with London underperforming, after the latest gross domestic product (GDP) figures showed the UK economy expanded just 0.1% in August.

Although it comes as welcome news for chancellor Rachel Reeves, Britain is now thought to have shrunk by 0.1% in July, revised down from the initial estimate of no growth.

The Office for National Statistics (ONS) also reported that GDP grew by 0.3% in the three months to August 2025 compared with the three months to May 2025, a slight increase following growth of 0.2% in the three months to July 2025.

Production grew by 0.4% during the month, while services showed no growth in August, and construction fell by 0.3%.

The pound (GBPUSD=X) rose against the dollar on the back of the news, rising from the two-month low hit earlier this week. However, the greenback remains weak after president Donald Trump said the US was locked in a trade war with China.

Separate data this morning also revealed that the UK’s trade deficit has widened, partly due to a drop in exports to the European Union and the US. Britain’s trade deficit widened to £3.4bn in August from £3bn in July.

This came in better than consensus forecasts, which was for a £4.8bn deficit.

Excluding precious metals, the trade deficit widened to £2.5bn, from £1.6bn, better than the £3.1bn forecast. Underlying trade, which excludes erratic factors and precious metals, widened sharply to £1.7bn from £0.4bn.

New trade data shows that UK exports to the US fell by £700m in August, due to “falls in exports of machinery and transport equipment, chemicals and material manufactures.”

Shipments to Europe also fell, with UK exports to the EU decreasing by £800m in August 2025, due to a £500m fall in exports of machinery and transport equipment, and a £200m fall in chemical exports.

London’s benchmark index (^FTSE) was 0.3% lower in afternoon trade

Germany’s DAX (^GDAXI) rose around 0.1% and the CAC (^FCHI) in Paris headed 0.8% into the green

The pan-European STOXX 600 (^STOXX) advanced 0.4%

The tech-heavy Nasdaq Composite (^IXIC) moved up nearly 0.5%, while the S&P 500 (^GSPC) put on roughly 0.3%. The Dow Jones Industrial Average (^DJI), which includes fewer tech stocks, added 0.25%.

The pound was 0.25% up against the US dollar (GBPUSD=X) at 1.3431

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