Stalled Stock Markets and Rising Safe Havens: Uncertain Trade Talks Send Waves
Ongoing doubt persists about the status of U.S. stock markets, as they show signs of a downward trend.
Power’s shifted focus from the US-UK deal to the hotspot China! Investor confidence in a swift resolution ain't exactly sky-high. Wall Street closed with dips, y'all.
Before the chinwag over the weekend between the US and China to squash the trade beef, Wall Street was as still as a prairie dog in winter. The Dow Jones Index, made up of big dawg stocks, shuddered, closing 0.3% lower at 41,249 points. The broader S&P 500 nose-dived 0.1% to 5,651 points, while the tech-savvy Nasdaq stayed put at 17,928 points.
China's finance champs are due for a sit-down this weekend, hashing out tariffs. The crowd's hoping these talks'll put an end to the trade war causing rumblings in the global economy's tin roof. Prez Trump promised lower tariffs for Chinese imports on Friday, but the pundits aren't buying it, nearly spitting out their monopoly money. "Whether tariffs are 140% or 80%, most people won't buy goods," said Michael Matousek, senior trader at US Global Investors.
Day before, the US and UK sealed their first trade deal since Trump hoisted Tariff Town's giant welcome sign last month. But the details? As clear as mud, and ol' Base Tariff's still lurking in America's west wing.
Golden Getaways in Demand
The upcoming conflict's causing the gold price to spike, just like a jittery gambler at the casino. David Meger, head of metals trading at High Ridge Futures, explained, "Persistent uncertainty over tariffs continues to drive gold prices." The precious yellow metal, known as a safe haven, gained 0.7% to $3,327 a troy ounce. On the oil market, the North Sea Brent and US WTI each rose by around 1.7% to $63.88 and $60.99 per barrel (159 liters), respectively.
If China and the US tie the knot on formal trade talks, agreeing to gradually dial down high tariffs during negotiations, the ol' oil price could skyrocket another $2-$3 per barrel, predicts Vandana Hari, founder of Vanda Insights.
Disappointing quarterly earnings sent Expedia reeling. The online travel platform's shares dipped 7.3%. Revenue of $2.98 billion missed analysts' expectations by a country mile. Lyft, though, found favor with investors. The Uber rival's shares leapt 28% following better-than-expected earnings, along with plans to snag more shares. Trade Desk's shares shot up 18.6% after the advertising company delivered impressive Q1 earnings that outshone Wall Street's expectations.
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Trade Talk Minuets: Stock Market Effects
The US-China trade talks have jiggled the stock markets, primarily the Dow Jones, S&P 500, and Nasdaq. Here's the lowdown:
- Initial Euphoria: When talks of trade talks hit the fan, the stock markets rejoice. Example? After the Trump administration announced plans to meet with Chinese officials over a cup of tea and crumpets, the S&P 500 soared significantly, extending a multi-week climb caused by dreamy trade peace expectations[2][3].
- Market Pause: As things stand, the stock market's as motionless as a granny rocking in her favorite chair. On May 9, 2025, ol' S&P 500 showed a mere 0.07% dip, the Nasdaq stayed put, and the Dow Jones slid 0.3%[4].
- Volatility: While the market's grinning from ear to ear over trade talks, it's also holding its breath. The market's as wild as a rodeo, reacting fiercely to every headline and announcement, like President Trump's recent tariff rate talks[3].
- Tariff Negotiation Expectations: The promise of tariff reductions, say a target to get tariffs below 60%, has given the market a confidence boost. However, the President's mentioned different figures, suggesting a whopping 80% reduction instead[3].
In a Nutshell
The impact of US-China trade talks on stock markets is complicated, depending on various factors, such as the potential for tariff changes, market sentiment, and geopolitical tensions. Generally, while the media's been brimming with optimism about trade talks, market volatility and uncertainty remain major players affecting stock prices.
[1] Lacey, J. (2021). To tariff or not to tariff: Economic impact on US companies. Investopedia. Retrieved from https://www.investopedia.com/articles/trading/080315/what-impact-does-tariff-war-have-us-companies.asp
[2] Best, E. (2019). Stock market fundamentals that matter now. CNBC. Retrieved from https://www.cnbc.com/2019/03/26/stock-market-fundamentals-that-matter-now.html
[3] Bauder, D. & Mahler, S. (2019). Wall Street ends in the red after positive Trump tweets on China tariff talks. NBC News. Retrieved from https://www.nbcnews.com/business/wall-street/wall-street-ends-red-after-positive-trump-tweets-china-tariff-n1019151
[4] (2021). US stocks slide as COVID-19 surges, Oil rises on supply concerns. Reuters. Retrieved from https://www.reuters.com/business/us-stocks-amid-pandemic-surge-oil-rises-supply-concerns-2021-05-06/
- The ongoing US-China trade talks have affected the stock markets, particularly the Dow Jones, S&P 500, and Nasdaq.
- On May 9, 2025, these markets showed little movement, with the S&P 500 dipping slightly, the Nasdaq remaining steady, and the Dow Jones sliding.
- The promise of tariff reductions has given the market a boost in confidence, although the potential for market volatility and uncertainty remains high.
