The major stock market averages all opened and are trading significantly higher this morning. The Dow Jones Industrial Average is currently up over 1,000 points – the NASDAQ Composite is trading higher by nearly 3.5 percent – while the Standard & Poor’s 500 Index is more than 2.5 percent higher in morning trade.
The healthy market gains can be attributed to a deal by the United States and China to temporarily slash tariffs after engaging in negotiations in Switzerland over the weekend. U.S. Treasury Secretary Scott Bessent described the negotiations as “very productive” and indicated that the two countries will meet again shortly to continue working on a larger agreement. This deal follows last week’s announcement that the United States and United Kingdom reached a preliminary trade deal, the first of its kind since the Trump Administrations tariff announcement on Liberation Day early last month.
Financial markets currently believe the worst of the trade-war and the tariff situation is behind us, resulting in the market surge this morning. While we do share in the market enthusiasm this morning, we also want to point out that there are still more negotiations to come with many different trading partners. We would not be surprised to see some setbacks and/or more market volatility surrounding tariffs/trade-deals.
Looking at the calendar this week, we’ll be getting some key economic numbers along with a fresh batch of corporate earnings. The Consumer Price Index, which will give us a fresh read on inflation, is scheduled to be released tomorrow morning, with expectations for a 2.4% year-over-year increase. April’s Retail Sales report, scheduled for release on Thursday, will give us an indication on how the consumer is holding up. Looking at the earnings front – companies scheduled to report this week include Cisco Systems, Walmart, Deere, and Applied Materials.
As always, contact us with any questions or if you would like to schedule a meeting.
All the best – Southport Station Financial Management.