Weekly Market Update

Weekly Market Update

As we head into another week of trading, markets are still reeling from the surprise US-China tariff rollback that kicked off last week's rally. The reprieve exceeded Wall Street's expectations and reassured some investors that President Trump's steepest tariffs are more a negotiating tactic than a permanent policy.

Key Takeaways:
• Stocks surged on Monday after White House officials said the U.S. and China had agreed to scale back tariffs for 90 days as negotiators work on a long-term deal.
• The reprieve exceeded Wall Street's expectations, but analysts warn that the administration still has plenty of work to do, with negotiations between the U.S. and dozens of countries continuing and Liberation Day tariffs set to go back into effect in early July.
• Treasury Secretary Scott Bessent said the U.S. and China agreed to slash tariffs on each other's imports for 90 days while officials hammer out a comprehensive trade deal.

Market Movements:
• The S&P 500 (^GSPC) rose nearly 3% to recoup all of its post-"Liberation Day" losses.
• The Dow Jones Industrial Average (^DJI) gained over 1,100 points, with the tech-heavy Nasdaq Composite (^IXIC) leading gains at 4.3%.
• Nvidia (NVDA) powered higher after a flurry of trade news bolstered prospects for the AI chip giant.

Economic Indicators:
• April's Consumer Price Index showed inflation pressures easing to four-year lows.
• Retail sales slowed sharply in April, barely rising in a sharp reversal from American consumers' pre-tariff spending burst in March.
• Federal Reserve policymakers are watching for incoming data to provide a clearer picture of the state of the economy.

Investor Sentiment:
• Consumer confidence fell in May as Americans grew more pessimistic about the inflation outlook, according to the latest University of Michigan consumer sentiment survey.
• The index came in at 50.8, its second-lowest reading on record, down from 52.2 for April.

As we move forward into another week of trading, investors will be closely watching for the next major development in Trump's trade push, with a focus on fresh deals and hints of shifts in the thaw with China. The administration can't negotiate deals with all partners at once due to limited capacity, and markets are staying vigilant for the next catalyst.