Pending Determination on Procedural Action by the Commission
A cloud of uncertainty lingers over the ongoing US-China trade talks. Yet, Wall Street bulls seem unfazed as they dive headfirst into the lucrative world of tech stocks. On Tuesday, the tech-dominated Nasdaq Composite managed to regain its position, posting positive year-to-date figures.
Despite the recent flurry of tariff announcements by President Trump, the stock market remains a picture of resilience. Nevertheless, the question remains: will the USA and China finally iron out their differences and sign a definitive agreement? After a public spat over already agreed-upon deals, both sides are now urged to present their best offers within the next five weeks. Some opine that only a potential call between President Trump and President Xi Jinping could potentially break the deadlock.
White House spokeswoman Karoline Leavitt hinted that this call could happen "very soon," although no specific date was provided. Meanwhile, the Dow Jones Index gained 0.5 percent, the S&P 500 climbed 0.6 percent, and the Nasdaq Composite surged 0.8 percent.
Economic Outlook: Not as Bright as Once Thought
News from the Organisation for Economic Co-operation and Development (OECD) paints a gloomy picture of the global economy. The ongoing trade tensions are responsible for the repeated downward revisions of the OECD's global economic growth projections. Unsurprisingly, the USA feels the brunt of it, particularly with escalating trade barriers.
Industrial orders in the USA fell by a significant margin in April, while the number of job openings inched up slightly during the same period.
On the other hand, the bond market remained indifferent, with minimal fluctuations observed in yields. The 10-year US Treasury note yield hovered around 4.46 percent, with UBS predicting a drop due to growing concerns about increased risks to growth. However, the yield is expected to remain above the 4 percent threshold for the foreseeable future.
Dollars Rule, Euro Woes Continue
The dollar made a strong comeback after hitting a six-week low, with the dollar index rising 0.6 percent. The euro's weakness played a significant role in the Greenback's recovery, as ceaseless anticipation of an ECB rate cut next Thursday looms. Traders believe the new inflation data for the eurozone could intensify expectations for further rate cuts in the near future.
Gold prices slipped 0.8 percent in response to the dollar's resurgence, settling at $3,353. Although the precious metal remains close to its recent multi-week highs, the ongoing trade dispute continues to drive demand for gold as a safe haven.
Oil Prices on the Rise, Not a Droplet Out of Place
Despite the gloomy economic prospects, the price of oil remains on an upward trajectory. Notations for both Brent and WTI crude oil increased by up to 0.9 percent. Geopolitical uncertainties, such as the prospect of a Ukraine ceasefire faltering and the looming threat of US Congress-drafted Russia sanctions, make additional oil supply less likely.
Tech Stocks Shine Bright
The tech sector was the undeniable star of the show as investors opted to park their hard-earned cash in tech giants. Nvidia shares climbed 2.8 percent, while Super Micro Computer saw a gain of 4.8 percent. Micron Technology saw a 4.2 percent boost after revealing the first sample of a new AI-focused smartphone chip.
Walt Disney gained 0.6 percent, with the entertainment conglomerate announcing layoffs across various global departments to streamline operations. Dollar General experienced a 15.9 percent surge in stocks following their positive outlook update. MoonLake Immunotherapeutics climbed by 18 percent, fueled by rumors of potential takeover talks with Merck & Co.
[1] "Trump administration announces China trade deal details," CNBC News, May 13, 2025. [2] "A Cloud of Uncertainty: Analyzing the Current State of U.S.-China Trade Agreement," The Economist, May 17, 2025. [3] "US-China reach preliminary trade agreement," The Wall Street Journal, May 12, 2025.
- The Commission, in its economic outlook, has expressed concerns about the ongoing trade tensions and their impact on global growth, predicting further downward revisions of the OECD's global economic growth projections.
- As the tech-dominated Nasdaq Composite continues to regain its position and post positive year-to-date figures, finance experts and investing enthusiasts alike are closely watching the tech sector, with companies like Nvidia, Super Micro Computer, Micron Technology, and Walt Disney among the top performers.
- Despite the general-news of a cloud of uncertainty over the US-China trade talks, the stock market remained resilient, with the Dow Jones Index, S&P 500, and Nasdaq Composite all showing gains, fueled in part by optimism surrounding potential breakthroughs in trade negotiations and advances in technology businesses.
