United States-China's trade war has thawed.
Treasury Secretary Scott Bessent said on Monday that the U.S. and China agreed to a 90-day pause on mutual tariffs, while the benchmark tariff rate dropped to 10%.
After escalating interaction measures last month, the Trump administration has imposed tariffs on Chinese imports as high as 145%. China imposes reciprocal tariffs on certain U.S. imports up to 125%.
Stock futures soared in the news.
Bessent touted on Sunday that “significant progress” has been made between the two countries after a long meeting in Geneva this weekend. Also to say Sunday morning, Bessent mocked comments to reporters.
As Yahoo Finance's Ben Werschkul reported on Sunday, Chinese state-run media also introduced the tabletop for Monday's landmark announcement, calling the negotiations constructive and said negotiators "conclude an agreement to establish a mechanism for China's U.S. economic and trade advisory mechanism" for further discussion.
Prior to the negotiations, President Trump had begun to open the door to soften China's tariffs, and mentioned that the tariffs seemed "right" on Friday. Monday's announcement shows that the agreement will put Levies' land well below this level.
On Monday, Becent said the U.S. would continue to move towards balanced trade, adding that the high tariffs imposed were "equivalent to an embargo."
"We do want trade," Best said.
Aside from tariff news, this week’s economic calendar brought key inflation data for investors, while Walmart’s revenue calendar slowed.
Stocks fell slightly after Fed Chairman Jerome Powell reiterated the central bank’s waiting for interest rate policies, and President Trump announced a trade deal between the United States and the United Kingdom.
With trade fluctuations in mobile stock rankings, all three major indexes were completed in the red last week. The S&P 500 index (^GSPC) sank about 0.5%, while the Dow Jones industrial average (^dji) slid about 0.2%, and the Nasdaq Composite (^i tocie) quit about 0.3%.
These moves look like they will reverse, and then Monday morning.
New inflation data launched this week will provide investors with the latest pricing pressure.
These readings are significant because they will be the first of “hard” economic data, which at least has captured at least some extent since Trump imposed a large amount of tariffs on the country’s trading partners. If the data suggests that the pressure is intensifying, it will strengthen the case that American consumers have created a high cost of the sub-rules and reduce their purchasing power. Manufacturers’ prices can also examine inflation before these costs hit consumers, revealing where prices are heading.
Analysts surveyed by Bloomberg expect the April Consumer Price Index (CPI) to rise 0.3% in April compared to last month. In March, headline prices fell for the first time since 2020. On a “core” basis, the volatility of food and gas is deprived of more volatility, and prices are expected to rise by 0.3% over the same period last month, compared with the same period last year, compared with 2.8%.
The Fed will watch inflation data with the rest of us.
Last week, central bank policymakers voted to keep interest rates in place, citing more data (and time) to understand the impact of tariffs, which are changing.
The central bank acknowledged that changes in trade policy increased risks to the U.S. economy.
"My intuition tells me that there is extremely high uncertainty about the economic path and the downside risk increases," Powell said in a press conference.
The Fed finds itself in a difficult position, facing the prospect of a weakened labor market and the steep inflation that could be caused by tariffs.
On Friday, Fed Gov. Michael Barr and New York Fed Chairman John Williams warned that tariffs are expected to lead to higher inflation, higher unemployment and lower economic growth this year.
This scattered cocktail is especially difficult to handle as the Fed has to maintain its tools. Lower interest rates to increase growth and achieve full employment may also cause rising prices. Holding rates for a longer period of time can help stabilize prices, but can harm people's work.
Now, the Fed is ready to wait. But Fed Chairman Powell and his colleagues realized that a tough economic scenario would require them to prioritize one of their two tasks, namely full employment and price stability.
This week will also bring a healthy dose of raves as at least nine Fed officials plan to hold talks in the days ahead, including Chairman Powell, Fed Vice Chairman Philip Jefferson and Fed Gov. Adriana Kugler.
Tesla waved a wave of good luck. Stocks of the electric car maker have climbed to their highest levels since February as the company gained optimistic trade developments for the third consecutive week.
As Yahoo Finance's PRAS Subramanian reported, widespread trade sentiment has driven the latest climb as Trump cuts tariffs on Chinese imports ahead of negotiations.
Tesla shares have grown nearly 15% over the past three weeks, a earnings update issued by CEO Elon Musk has improved his plan to spend more time on the company as it stays away from the Trump administration. However, Tesla’s news is not all positive, as continued sales weaknesses plagued the company’s European market.
For Tesla, like Boeing last week, the prospect of a trade deal could serve as an important catalyst. Going forward, putting Wall Street in the dynamic negotiations that watch trades means investors are eager to understand which companies will connect to potential deals or get the benefits of relaxed tensions. Where there is a trade deal, there will be a trade winner.
Economic data: There is no obvious release of economic data sets.
income: Fox Corporation (FOXA), Monday (MNDY), Chegg (Chgg), Rigetti Computing (RGTI), Plug-in Power (Plug-in), Hertz (HTZ), Topgolf Callaway (MODG)
Economic data: Consumer Price Index, Monthly Over Month, April (Expected +0.3%; Previously -0.1%); Consumer Price Index, April (Expected +2.4%; Previously +2.4%); Core Consumer Price Index, Monthly Over Month, April (Expected +0.3%; Previously +0.1%); Core Consumer Price Index, Yearly, April (Expected +2.8%; Previously +2.8%)
income: JD.com (JD), Sea Limited (SE), Honda (HMC), Under Armour (UAA, UA), Holding (Onon), NU Holdings (NU)
Economic data: MBA mortgage application, May 9 (+11% before)
income: Sony (Sony), Tencent (TCEHY), Cisco (CSCO), Coreweave (CRWV), Jack in the box
Economic data: Retail sales, April (expected +0%; previous +1.4%); Manufacturer price index, monthly over month, April (expected +0.2%; previous -0.4%); Manufacturer price index, April (expected +2.5%; previous +2.7%); Core manufacturer price index, monthly over month, April (expected +0.3%; previous -0.1%); Core manufacturer price index, year-on-year, April (expected +3.1%; previous +3.3%)
income: Walmart (WMT), Alibaba (Baba), Deer & Company (de), Birkenstock (birk), netease (ntes), Applied Materials (amat), Cava (cava) (cava), take-take-two Interactive (ttwo)
Economic data: Housing starts, April (expected +3.1%; previously -11.4%); Building Permits, April (expected -1.2%; previously +0.5%); Import Price, Monthly Over Month, April (expected -0.4%; previously -0.1%); University of Michigan Consumer Sentiment, May, Preliminary (expected 53.1; previously 52.2)
income: Flower food (Flo)
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