Today’s Midday Market Update: Markets Surge on US-China Trade Breakthrough
Based on the information gathered, I’ll now write the requested article about today’s midday market update.
Major Indexes Rally as Tariff Tensions Ease
As of midday Monday, May 12, 2025, U.S. stock markets are experiencing a significant rally following a breakthrough in US-China trade relations. The major indexes are all posting substantial gains after the two economic powerhouses agreed to temporarily reduce tariffs, bringing the U.S. tariff rate on Chinese imports down to 30% and China’s duties on U.S. imports to 10%.
The Dow Jones Industrial Average is up 2.1% (approximately 900 points), while the S&P 500 has surged 2.3% and the tech-heavy Nasdaq Composite is leading the charge with an impressive 3.1% gain.
Treasury Secretary Scott Bessent described the trade discussions as “very robust and productive,” helping to reignite risk appetite on Wall Street. The agreement includes a 90-day period during which both sides will work toward a broader trade deal.
Tech Giants and Retailers Lead the Charge
Technology companies and retailers, which are particularly vulnerable to China tariffs, are among today’s biggest winners. Megacap tech stocks that had been hard hit earlier this year are now posting some of the most substantial gains:
– Tesla (TSLA) is up more than 7%, a welcome boost as the company has faced declining sales in China amid increasing competition from local automakers.
– Amazon (AMZN) has also surged more than 7%, benefiting from reduced tariff pressures.
– Apple (AAPL), which manufactures the majority of its iPhones in China, has gained more than 6%.
– Meta Platforms (META) and Nvidia (NVDA) have advanced more than 5% and 4%, respectively.
In the retail sector, companies heavily exposed to Chinese imports are celebrating the tariff reduction:
– RH (RH) has jumped 17%
– Best Buy (BBY) is up 10%
– Five Below (FIVE) has rallied 11%
Chinese Stocks and Casino Operators Benefit
U.S.-listed shares of Chinese companies are also experiencing significant gains following the tariff announcement. E-commerce giants PDD Holdings (PDD) has climbed more than 8%, while Alibaba (BABA) and JD.com (JD) have risen 7% and nearly 6%, respectively. Chinese tech giant Baidu (BIDU) has jumped more than 4%.
Casino operators with significant exposure to China through their properties in Macao are also benefiting, with Las Vegas Sands (LVS) and Wynn Resorts (WYNN) each climbing more than 3%.
Pharmaceutical Sector Under Pressure
Not all sectors are participating in today’s rally. Pharmaceutical stocks are trading lower after President Donald Trump announced plans to sign an executive order aimed at reducing prescription drug costs “almost immediately, by 30% to 80%” to match prices paid by several other countries.
Major pharmaceutical companies feeling the pressure include:
– Eli Lilly (LLY), down about 3%
– Amgen (AMGN) and Pfizer (PFE), each dropping more than 2%
– Johnson & Johnson (JNJ) and Merck (MRK), both declining more than 2%
Notable Corporate News
In other corporate developments, NRG Energy (NRG) has seen its shares increase almost 9% after announcing plans to acquire a power portfolio from LS Power for $12 billion. The deal includes several natural gas generation facilities across nine states and is expected to close in the first quarter of next year.
Upcoming Economic Events This Week
Investors should keep an eye on several important economic releases scheduled for this week:
– Tuesday, May 13: Consumer Price Index (CPI) data will be released, with analysts expecting the headline CPI to rise at a 2.3% year-on-year rate, slightly lower than March’s 2.4% gain.
– Thursday, May 15: A busy day for economic data with the release of:
– Advance Retail Sales
– Empire State Manufacturing Survey
– Philadelphia Fed Manufacturing Survey
– Producer Price Index (PPI)
– Industrial Production and Capacity Utilization
– Friday, May 16: Business Leaders Survey, Import and Export data, New Residential Construction figures, and the preliminary Michigan Consumer Survey will be released.
Earnings Reports to Watch
Several companies are scheduled to report earnings this week, which could impact market sentiment:
– Monday (Today): Fox (FOXA), NRG Energy (NRG), Monday.com (MNDY), and several others are reporting.
– Later this week: Alibaba (BABA), Walmart (WMT), Plug Power (PLUG), Cisco Systems (CSCO), and Applied Materials (AMAT) will release their quarterly results.
Market Outlook
The market’s strong performance today reflects renewed optimism about global trade relations, which had been a significant source of uncertainty. Analysts suggest that if the positive momentum in US-China relations continues, it could help offset concerns about inflation and potential economic slowdown.
However, investors should remain cautious as the week progresses, particularly with the upcoming inflation data that could influence Federal Reserve policy decisions. While today’s rally is encouraging, market participants will be closely monitoring whether this positive sentiment can be sustained as more economic data becomes available.
The trade agreement represents a significant de-escalation in tensions between the world’s two largest economies and could provide a much-needed boost to global growth prospects if the temporary measures lead to a more comprehensive deal.
