Opening Bid Unfiltered Why US-China tariff agreement isn’t super bullish for stocks
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May 12, 2025 Lale Akener, a Global Markets Analyst at eToro, dives into the recent surge of the Magnificent 7 stocks, driven by impressive earnings from tech giants like Microsoft and Google, which defied expectations. He discusses the implications of China's tariff decisions on U.S. markets, balancing economic stability with ongoing challenges. Akener also highlights how Federal Reserve rate cuts could influence trade negotiations and the necessity for investors to diversify in response to trade tensions and fluctuating market conditions.
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MAG-7 Stocks Lead Rally
- The MAG-7 stocks rallied 18% from April lows due to strong earnings and positive tech sector growth.
- Large-cap tech yielded 28% earnings growth vs. 9% for other S&P 500 stocks in Q1, supporting their market leadership.
Tariff Deal Is Cautiously Positive
- The US-China tariff reduction is a significant de-escalation but structural trade issues remain.
- Past deals show these arrangements can be fragile, so actual outcomes matter more than headlines.
Trade News Boosts Sentiment but Uncertainty Lingers
- Market participants react positively to trade deal news, but real economy uncertainty affects business decisions.
- Uncertainty is causing pause in decision-making from businesses and consumers alike.