Wall Street rallies as US-China trade truce sparks tech surge

The temporary reduction in US-China tariffs has brought relief to markets, boosting technology stocks and cryptocurrencies while calming inflation fears. Despite lingering uncertainty about the long-term trade relationship, investors are cautiously optimistic after both countries agreed to slash reciprocal tariffs during a 90-day negotiation period. Reuters + 6

Market snapshot: Nasdaq leads gains while Dow slips

U.S. equity markets showed mixed performance today, with technology-heavy indices outperforming industrial stocks:

• S&P 500: 5,886.55, +0.72%
• Nasdaq Composite: 19,010.09, +1.61%
• Dow Jones Industrial Average: 42,140.43, -0.64% Bloomberg + 2
• Russell 2000: Data shows positive momentum following two consecutive positive weeks Yahoo Finance + 2

Technology stocks led the market higher as the US-China tariff agreement particularly benefited companies with significant Chinese market exposure. Trading volume remained robust, with market sentiment improving after the initial shock of April’s trade tensions. CNBC

Top movers: Coinbase surges on S&P 500 inclusion

Several notable stocks posted dramatic moves today:

• Coinbase (COIN): +23.97% to $256.90 after announcing inclusion in the S&P 500 Index, replacing Discover. CNN Bitcoin’s recent strength above $100,000 further boosted sentiment.
• First Solar (FSLR): +22.66% to $191.60 following a Wolfe Research upgrade to “Outperform” with a $204 price target. The company’s domestic manufacturing footprint positions it favorably amid trade tensions.
• Archer Aviation (ACHR): +22.85% to $11.16 after reporting better-than-expected Q1 earnings with EPS of -$0.17 versus -$0.28 forecast. Yahoo FinanceYahoo Finance
• NuScale Power (SMR): +21.75% to $21.66 following positive Q1 earnings and increased demand for stable power sources for AI data centers. The Motley Fool
• UnitedHealth Group (UNH) declined to $382.15, trading near 52-week lows after CEO Andrew Witty resigned for “personal reasons” following the company’s first earnings miss since 2008. Home Healthcare News + 6

Economic data: Inflation moderates despite trade concerns

The April Consumer Price Index came in below expectations, suggesting limited tariff impact so far:

• Headline CPI: +0.2% month-over-month (vs. +0.3% expected)
• Annual inflation: 2.3% year-over-year, down from 2.4% in March
• Core CPI: +0.2% month-over-month, with annual core inflation at 2.8% CNBC + 3

This marks the smallest 12-month headline increase since February 2021, providing the Federal Reserve with breathing room as it navigates trade policy uncertainty. Schwab Brokerage + 2

The broader economic picture shows mixed signals, with GDP contracting 0.3% in Q1 2025 (January-March) according to the advance estimate, the first quarterly decline since Q1 2022. The decrease primarily reflected a surge in imports ahead of potential tariff implementation. Oilprice + 2

Fed watch: Powell maintains “wait and see” approach

The Federal Reserve maintained its federal funds rate at 4.25-4.5% during its May 7 meeting, with Chair Powell emphasizing a “wait and see” approach regarding how tariff policies will unfold. Edward JonesCNBC

The FOMC statement noted that “uncertainty about the economic outlook has increased further” and that “the risks of higher unemployment and higher inflation have risen.” Federalreserve + 3 Market expectations for rate cuts have shifted, with September now seen as more likely than June for the next reduction. Edward Jones

Corporate deal-making: Energy and healthcare see major moves

Several significant acquisitions have been announced:

• NRG Energy (NRG) jumped 26.21% after announcing acquisition of Premier Power Portfolio from LS Power for approximately $6.4 billion, doubling NRG’s generation capacity. Investopedia + 3
• Novartis agreed to acquire Regulus Therapeutics for up to $1.7 billion, gaining access to farabursen, an investigational treatment for polycystic kidney disease.
• Merck KGaA is acquiring US-based SpringWorks Therapeutics for $3.9 billion, immediately adding revenue and accelerating growth for its healthcare business.

Tech focus: Cisco reports today as AI momentum continues

The technology sector remains in focus with several key developments:

• Cisco Systems reports fiscal Q3 2025 earnings after market close today, with analysts expecting EPS of $0.92 (+4.5% YoY) on revenue of $14.1 billion (+11% YoY). Cisco + 5
• Dynatrace released Q4 earnings this morning, with analysts expecting revenue growth of 14.3% year-over-year. Seeking Alpha + 3
• AI infrastructure continues to drive spending across the sector, with data center investments accelerating to support machine learning applications. CiscoCisco

Global markets: Cautious optimism prevails

International equity markets showed generally positive momentum:

• Europe: FTSE 100 flat at 8,602.92, Yahoo Finance DAX up 0.31% at 23,638.56, CAC 40 up 0.30% at 7,873.83 Yahoo Finance + 2
• Asia: Nikkei 225 up 1.43% at 38,183.26, Yahoo Finance Shanghai Composite up 0.51% at 3,934.85, Hang Seng up 1.51% at 23,438.11 TrowepriceCNBC

The euro strengthened against the dollar, with EUR/USD up 0.94% to 1.1191, while USD/JPY traded near 148.00, having surged nearly 2% on Monday as investors moved away from safe-haven assets. Forex + 2

Commodities: Oil steadies while gold holds near record territory

• Oil: WTI crude trading around $63.50 per barrel, steadying after recent declines. OPEC+ recently announced production increases of 411,000 barrels per day in June. CNBC + 3
• Gold: Trading near $3,240 per troy ounce, up approximately 23-24% since the beginning of 2025 despite a temporary pullback following the US-China tariff announcement. CNBC + 2
• Natural Gas: Henry Hub spot price rose to $3.17 per MMBtu, up 5 cents from the previous week. Eia + 2

Bonds and rates: Yields rise on trade optimism

Treasury yields have climbed following positive trade developments:

• 2-year Treasury: 3.94%
• 10-year Treasury: 4.35%
• 30-year Treasury: 4.79% Schwab Brokerage + 2

The yield curve has normalized somewhat from its inverted position earlier this year, Advisorperspectives with corporate bond spreads widening to 94 basis points for investment-grade bonds (widest since September 2024). Reuters

Mortgage rates remain elevated, with the 30-year fixed rate averaging 6.91% nationally, though significantly below the 8.01% peak reached in late 2023. Advisorperspectives

Crypto corner: Bitcoin stabilizes above $100K

The cryptocurrency market continues to exhibit strength:

• Bitcoin: $103,630, up 1.01% in the last 24 hours
• Ethereum: $2,666.82, up 8.08% in the last 24 hours, outperforming following the successful implementation of its Pectra upgrade Investopedia + 2

The total cryptocurrency market capitalization stands at approximately $2.06 trillion, with Bitcoin maintaining dominance at 61.9% of total market cap. CoinCodex Institutional adoption continues to accelerate, with Bitcoin ETFs attracting substantial inflows.

Looking ahead: Trade talks take center stage

Market focus remains firmly on the US-China trade negotiations during the 90-day tariff reduction period. While the temporary truce has calmed immediate fears, longer-term uncertainty persists about permanent trade arrangements. CNBC + 4 With core inflation moderating and the Fed signaling patience, investors are cautiously rebuilding risk positions while keeping a watchful eye on corporate earnings and economic indicators for signs of trade policy impact. Reuters + 4