Midday Market Roundup for Monday, May 12, 2025

Good afternoon. Here are the top four global financial and economic topics shaping markets at midday, Monday, May 12, 2025:

1. U.S. and China Announce 90-Day Tariff Truce, Markets Surge

Global markets rallied sharply after the United States and China announced a preliminary agreement to reduce reciprocal tariffs for 90 days, signaling a pause in the trade dispute that has weighed on the global economy for months. The deal, reached in Geneva, involves lowering tariffs to 10% from recent highs exceeding 100% and suspending or removing other retaliatory measures. The S&P 500 futures jumped nearly 3% before the open, the Nasdaq and Russell 2000 futures rose by almost 4%, and Hong Kong’s Hang Seng Index surged 3%. The dollar index hit its highest level over a month, and U.S. Treasury yields climbed to a one-month high. This U.S.-China trade truce is a significant development that all market participants should be closely following. While investors welcomed the truce as a substantial de-escalation, analysts cautioned that the 90-day period is a window for further negotiations rather than a permanent resolution, leaving uncertainty about the long-term outlook ([Reuters]1; [Stars and Stripes]6; [Pittsburgh Post-Gazette]7).

2. Tech and Retail Stocks Lead Gains; Pharma Rebounds

U.S. technology and retail stocks soared on the news of the tariff pause, with Amazon, Tesla, and Apple each gaining more than 5% to 7% in midday trading. Semiconductor companies like Nvidia and Broadcom also posted significant advances. Retailers sensitive to Chinese imports, such as Five Below, RH, and Nike, saw double-digit percentage gains. U.S.-listed Chinese tech giants Alibaba, JD.com, and Baidu rose over 5%. Meanwhile, pharmaceutical stocks rebounded after President Trump’s executive order on drug pricing was viewed as less severe than feared, with Merck, Pfizer, and Eli Lilly up more than 2%. In contrast, CVS Health fell 5% as direct-from-manufacturer proposals weighed on pharmacy chains ([CNBC]2).

3. Economic Data and Fed Policy in Focus

Investors are watching for key U.S. economic data this week, including April inflation (CPI), retail sales, and industrial production. The Federal Reserve held its benchmark interest rate steady at 4.25–4.5% at its May meeting, citing concerns that tariffs could push inflation higher in coming months. S&P Global notes that FOMC members will unlikely change rates before the 90-day tariff pause expires in July. Analysts closely monitor whether inflation pressures intensify and if GDP could fall again in the second quarter, marking a technical recession. Despite these potential challenges, the resilience of the U.S. economy is evident. Preliminary University of Michigan consumer sentiment data for May will also be closely watched after recent volatility in household confidence and inflation expectations ([S&P Global]3).

4. Global Growth Outlook Remains Cautious

Despite the positive market reaction, the International Monetary Fund (IMF) revised its global growth projection for 2025 to 2.8%, citing the lingering costs of trade disruptions and ongoing economic uncertainty. The IMF and other multilateral organizations continue to urge the U.S., China, and other major economies to pursue lasting solutions to trade disputes and avoid protectionist measures that could further dampen growth. Meanwhile, regional developments-such as India and Pakistan’s ongoing ceasefire talks and China’s modest growth in crude oil imports-are also contributing to a cautiously optimistic but fragile global economic landscape ([Atlantic Council]8; [Reuters]1).

Sources

1. Reuters: https://www.reuters.com/markets/us/global-markets-view-usa-2025-05-12/
2. CNBC: https://www.cnbc.com/2025/05/12/stocks-making-the-biggest-moves-midday-amzn-baba-pfe-five-nke.html
3. S&P Global: https://www.spglobal.com/marketintelligence/en/mi/research-analysis/week-ahead-economic-preview-week-of-12-may-2025.html
4. Stars and Stripes: https://www.stripes.com/theaters/us/2025-05-12/us-china-tariffs-pause-17764360.html
5. Pittsburgh Post-Gazette: https://www.post-gazette.com/news/world/2025/05/12/us-china-trade-deal-tariffs-geneva/stories/202505120022
6. Atlantic Council: https://www.atlanticcouncil.org/blogs/econographics/multilateralism-under-pressure-takeaways-from-the-2025-imf-spring-meetings/

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