Squawk on the Street Market Rallies on U.S.-China Trade Deal, Pharma Stocks Slide on Trump Executive Order News 5/12/25
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May 12, 2025 Monday's market saw a significant rally fueled by a new 90-day tariff pause in U.S.-China trade talks. Investors are buzzing about strategies as the pharmaceutical sector faces pressure from an executive order aimed at reducing drug prices. The discussion highlights major implications for both tech and pharma stocks, with Trump’s remarks stirring up further complexities. The analysis also touches on investor behavior and challenges within the retail sector amid fluctuating oil prices and a stronger dollar.
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U.S.-China Tariff Pause Sparks Rally
- The 90-day U.S.-China tariff pause reduces trade uncertainty and could revive commerce between the two nations.
- This truce suggests a less confrontational Trump administration in trade relations, shifting from adversarial stances.
Drug Price Order's Practical Limits
- The president's executive order on lowering drug prices faces legal and practical challenges without legislation.
- Pharma companies and HHS will negotiate drug prices, with possible regulatory action if the results are unsatisfactory.
Legislation Needed for Drug Reform
- Don’t rely solely on executive orders for drug price reform; legislative action is necessary.
- Watch for negotiations between pharma and government and remain cautious about immediate market impacts.