Wall Street Breakfast
Markets react as U.S., China call tariff timeout
May 12, 2025
The latest developments in U.S.-China trade have led to a 90-day tariff pause, sparking market optimism. Amazon-backed Scale AI is eyeing expansion in Saudi Arabia. President Trump's bold plan promises to slash U.S. drug prices by up to 80%. Market reactions are intense, especially in pharmaceuticals and tech, as global price standards shift. Plus, a look at notable stock movements, including the 'Magnificent Seven' and trends in oil and cryptocurrency adds extra intrigue.
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Quick takeaways
- The U.S. and China’s agreement to pause most tariffs for 90 days represents a significant thawing of trade tensions.
- Trump's executive order to reduce drug prices aims for fairness in pharmaceutical costs, impacting Asian pharmaceutical stock prices negatively.
Deep dives
U.S.-China Trade Agreement
The U.S. and China have agreed to a temporary suspension of most tariffs on each other's goods, marking a significant step towards easing trade tensions. Treasury Secretary Scott Besessent announced a 90-day pause and a reduction of tariffs, with the U.S. lowering tariffs on Chinese goods from 145 percent to 30 percent. In response, China will cut its tariffs from 125 percent to 10 percent. This agreement was reached following productive trade talks in Switzerland and has resulted in positive movements in stock futures across major indices.
