Optimism grows ahead of U.S.-China talks 09/05/2025

HOT stories for today

US market wrap:

• Wall Street ended Thursday on a positive note, with major indexes climbing as investor sentiment held firm. The S&P 500 advanced 0.43% to close at 5,631.28, the Dow Jones Industrial Average rose 0.7% to 41,368.45, and the tech-heavy Nasdaq Composite added 0.27% to settle at 17,928.14. Among standout movers, Nvidia jumped more than 3% after reports suggested the Trump administration may roll back certain chip trade restrictions—reigniting optimism in the AI and semiconductor sectors.
• Adding to the day’s developments, former President Trump made headlines by unveiling the outline of a new trade agreement with U.K. Prime Minister Keir Starmer—delivered unconventionally via speakerphone from the Oval Office. According to a graphic posted on Truth Social, the deal includes a 10% baseline tariff on British imports. Trump emphasized that this figure may be on the lower end compared to tariffs planned for other nations, warning that countries with "massive trade surpluses" should expect significantly higher rates. Despite the fanfare, the announcement was light on specifics, and no formal agreement was signed.

Optimism grows ahead of U.S.-China talks
 

• U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are set to meet with Chinese Vice Premier He Lifeng in Geneva from May 9 to 12 for initial trade discussions aimed at easing escalating tensions between the two countries. These talks, initiated at the U.S.’s request, come amid a significant trade war, with the U.S. having imposed 145% tariffs on Chinese goods and China retaliating with 125% tariffs. Bessent emphasized that the upcoming conversations are preliminary and intended for de-escalation rather than reaching a comprehensive trade deal.  The Trump administration is considering a significant reduction in tariffs on Chinese imports, potentially lowering them from 145% to between 50% and 54% as early as next week.
• This move coincides with the upcoming U.S.-China trade negotiations in Switzerland and reflects growing industry optimism for a resolution to the trade conflict.  He Lifeng, a close ally of Chinese President Xi Jinping, is leading China's delegation in the renewed high-level trade talks. Replacing Liu He, He Lifeng brings a long-standing relationship with Xi and a reputation for being a more resolute negotiator. The upcoming Geneva meetings mark the first face-to-face talks since a recent escalation in tariffs.

Stocks on the move:
 

• Affirm (AFRM) — Shares of the "buy now, pay later" provider slid 9% after the company released fiscal fourth-quarter revenue guidance in the range of $815 million to $845 million. The midpoint of $830 million came in below the $841 million consensus forecast from LSEG.
• Pinterest (PINS) — The social media platform surged over 15% following upbeat second-quarter revenue guidance that exceeded expectations at the midpoint. First-quarter revenue also surpassed analyst projections, reaching $855 million compared to the $847 million forecast by LSEG.
• Coinbase (COIN) — The crypto trading platform dipped 3% after posting first-quarter revenue that missed forecasts. Coinbase reported $2.03 billion in revenue, falling short of the $2.12 billion anticipated by analysts surveyed by LSEG.
• Microchip Technology (MCHP) — The semiconductor manufacturer rallied 7% after delivering fiscal first-quarter guidance that outpaced Wall Street expectations.
• The Trade Desk (TTD) — Shares of the digital advertising firm jumped nearly 13% on stronger-than-anticipated Q1 results. The company posted earnings of 33 cents per share (excluding items) on $616 million in revenue, topping LSEG estimates of 25 cents and $584 million, respectively.

Today’s action
 

• Chinese exports jumped despite the pressure from recently heightened U.S. tariffs, while imports showed signs of stabilization, aided by Beijing’s ramped-up stimulus. Hong Kong’s Hang Seng slipped 0.15%, and the mainland CSI 300 fell 0.22%. Uncertainty surrounding the outcome of U.S.-China trade talks in Switzerland continued to weigh on sentiment. Japan’s Nikkei 225 climbed 1.42%, and the Topix rose 1.06%. South Korea’s Kospi added 0.3%, while the Kosdaq declined 0.59%.
• U.S. stock futures were little changed, with markets hopeful that the U.S.-U.K. trade framework signals broader momentum. Dow futures dropped 52 points (0.1%), Nasdaq 100 futures edged down 0.08%, and S&P 500 futures slipped about 0.1%. Though no major economic data is due today, several FOMC officials are scheduled to speak, potentially offering fresh policy signals.

Watchlist: COIN, AFRM, TTD, MCHP, PINS, MNST, PLTR, NVDA

Bitcoin
 

• Bitcoin surged to $103,090.17, its highest level since January, driven by increased inflows into ETFs and significant purchases by large-scale investors. Analysts anticipate a new all-time high soon, potentially exceeding previous targets of $120,000. Ethereum (ETH) rose to $2,214.81, while Solana (SOL) increased to $161.57, reflecting overall positive sentiment in the cryptocurrency market. 
• Recent market volatility has turned into a tailwind for Bitcoin, as investors increasingly question the U.S. dollar’s reputation as a reliable safe haven. While the Trump administration has softened its tone on tariffs, uncertainty around the future direction of trade policy remains high. This lack of clarity is prompting a growing number of investors to seek refuge in alternative assets—pushing Bitcoin further into the spotlight as a potential hedge.
  Watchlist: Bitcoin: 74 000-100 000, Ethereum:1500-2800, Solana: 80-180

Forex
 

• The euro declined to a one-month low of $1.1210 against the U.S. dollar, pressured by the European Central Bank's recent 25 basis point rate cut to 2.25% and the Fed's hawkish stance. Investors are cautious ahead of further economic indicators that could influence future monetary policy decisions.
• The U.S. dollar strengthened against the Japanese yen, reaching a one-month high of 146.17 on Thursday before slightly retreating to 145.77. The movement was driven by increased U.S. Treasury yields and optimism over trade agreements, particularly the recent U.S.-UK deal.
  Watchlist: EUR/USD: 1.0700-1.1600, USD/JPY: 140-144

Basic Materials
 

• Gold prices continued their decline, falling 0.5% to around $3,288 per ounce, marking a 3.6% drop over the past two sessions. The decrease is attributed to rising U.S. Treasury yields and a stronger dollar, which dampen the appeal of non-yielding assets like gold.
• WTI crude oil prices edged up 0.2% to $60.02 per barrel, building on Thursday's 3.2% surge. The gains are supported by expectations of increased demand amid easing trade tensions and a drawdown in U.S. inventories.
  Watchlist: GOLD 2600-3500, US Oil: 55.60-70.00

Key Economic Events Today:

EST time
08:30 am: USD FOMC Member Williams Speaks
08:30 am: USD FOMC Member Barkin Speaks
10:00 am: USD FOMC Member Goolsbee Speaks
11:30 am: USD FOMC Member Waller Speaks
07:45 pm: USD FOMC Member Cook Speaks


Earnings

BMO (Before the US Market opens)
ENB          Enbridge Inc.
PAA          Plains All American Pipeline
SATS        Echostar Corp.
AMC (After the US Market closes): enjoy your weekend!
 

The TEFS Analyst team wishes you a successful day!