Wall Street Plows Ahead Amid Trade Turbulence - Tech Stocks Surge
Procedure's initiation decision by the Commission remains undecided.
Stocks on Wall Street showed resilience on Tuesday, buoyed by tech stocks, despite ongoing trade uncertainties between the USA and China. The trade situation is set for discussion soon, but until then, a cloud of uncertainty lingers.
In the tech sector, demand for stocks soared. The Nasdaq Composite is back in the positive for the year, proving investors' confidence despite the new tariff announcements from President Trump. Despite accusations of undermining agreed-upon deals, both countries continue negotiations, with some expecting a high-level call between Presidents Trump and Xi Jinping to break the stalemate.
However, the jury's still out on whether the USA and China can reach a final trade agreement. According to Michael Brown, market strategist at Pepperstone, such a call might occur this week. At a press conference on Tuesday, White House spokeswoman Karoline Leavitt confirmed that a call between the leaders would happen "very soon."
The Dow Jones Index gained 0.5 percent to 42,520 points, while the S&P 500 closed 0.6 percent higher. The Nasdaq Composite rose 0.8 percent. On the NYSE, 1,916 stocks gained ground, 853 lost, and 62 remained unchanged.
Economic Prospects Dim
New projections from the Organisation for Economic Co-operation and Development (OECD) highlight the detrimental effects of the ongoing trade dispute on economic growth. The OECD has lowered its forecast for global economic growth this year and next due to increased trade barriers and persistent uncertainty, with the USA being particularly negatively affected. This is mirrored in China's weak economic data, such as the decline in industrial orders in the USA.
On the bond market, yields displayed little change and recovered from initial moderate losses. The yield on ten-year US Treasury notes remained largely unchanged at 4.46 percent, with UBS expecting rising yields due to growth risks, but not falling below the 4 percent mark for the ten-year period in the coming months.
The dollar rebounded strongly, with the dollar index rising 0.6 percent. The ongoing trade dispute continues to drive demand for gold as a "safe haven," despite the precious metal falling by 0.8 percent to $3,353 after a strong rally the day before.
Tech Stocks Shine
Technology stocks were in high demand, with companies like Nvidia, Super Micro Computer, and Micron Technology seeing significant gains. Walt Disney gained 0.6 percent, while Dollar General jumped 15.9 percent after raising its outlook. MoonLake Immunotherapeutics saw an 18 percent increase due to takeover talks with Merck & Co.
The strength of the dollar weighed on the gold price, while oil prices continued to rise despite the gloomy economic outlook. Stable oil quotes were due to low hopes for a ceasefire in Ukraine and potential new Russia sanctions affecting the oil sector.
Source: ntv.de, toh/DJ
- Wall Street
Enrichment Data:
- Tariff Reductions: In the recently announced trade agreement between the USA and China (May 12, 2025), both countries agreed to reduce tariffs by 115%, leaving a 10% reciprocal tariff in place. China also agreed to remove non-tariff countermeasures[1][3].
- Temporary Measures: The current agreement is temporary, with the potential for tariffs to rise if further agreements are not reached by August 14, 2025[2].
- Future Discussions: The agreement sets a path for continued discussions to address trade concerns, but the outcome of these talks is uncertain[1][3].
Given these factors, a potential call between Presidents Trump and Xi Jinping is likely part of ongoing diplomatic efforts to stabilize the agreement. However, whether this will lead to a finalized trade agreement remains uncertain due to the temporary nature of the current deal and ongoing tensions[1][3].
The Commission is expected to closely monitor the ongoing trade negotiations between the USA and China, considering the recent reduction of tariffs by 115% as stipulated in the newly announced agreement. The Commission might also be interested in the potential high-level call between Presidents Trump and Xi Jinping, as it could influence the general-news landscape, especially concerning tech stocks and the tech sector's lifestyle. For instance, the surge in tech stocks, such as Nvidia, Super Micro Computer, and Micron Technology, could be affected by any decisions or agreements reached during this call. Similarly, sports enthusiasts might find it intriguing if the discussion between the leaders contributes to a resolution of the trade impasse, which has had negative implications on the ecosystem, leading to a slowdown in economic growth and affecting the performance of various stocks on Wall Street, including Walt Disney and Dollar General.
