Investing
Stock Market Live May 12: Trump Cuts China Tariff, S&P 500 (VOO) Soars
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Key Points
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The Trump Administration agreed to a 90-day pause on most of its tariffs against China over the weekend. Tariff rates will fall to 30% for U.S. imports from China, 10% on exports to China.
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The deal is temporary but the Administration calls it a “win” and investors seem to agree.
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Live Updates
Live Coverage Has Ended
Green Investing
The Vanguard S&P 500 ETF ended Monday in the green, closing up 3.3%, after China’s Commerce Ministry agreed with the Trump Administration that the weekend suspension of (most) reciprocal tariffs between the two nations is an “important step” in easing trade tensions.
I'm Perplexed. Is This Good or Bad News?
The Wall Street Journal reports that AI startup Perplexity is in “advanced” talks to raise $500 million in private funding from venture capital firms including Accel. The company’s implied private market valuation would be $14 billion, up 56% from its $9 billion valuation in the last funding round in November.
Tariffs? What Tariffs?
It seems someone didn’t get the memo about how tariffs just got slashed, and how this is supposed to be all unicorns and rainbows for consumer goods retailers today. This morning, analysts at Bernstein downgraded Target (NYSE: TGT) stock to underperform ahead of earnings, warning the company will suffer from weak consumer sentiment, unfavorable weather, and a “DEI-related strike” in March.
Bernstein is expecting Target to lower its guidance this year. The stock is up 4.9% today regardless.
The Voo From Above
Stock markets opened deeply in the green Monday, just as pre-market trading suggested they would. Both the S&P 500 and the Vanguard S&P 500 ETF — the “Voo” — that represents it are up 2.8% as investors react positively to news of a temporary reprieve on the Trump tariffs. Best Buy (NYSE: BBY) is one notable gainer, up 7.3%, although the rally is looking pretty wide-spread, with hardware retailers such as Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW) also up, 3.5% and 4.2%, respectively.
This article will be updated throughout the day, so check back often for more daily updates.
The Trump Administration agreed on a pause in its tariffs war with China over the weekend. For the next 90 days at least, China will lower tariffs on imported U.S. goods to 10%, and the U.S. will cut tariffs on imported Chinese goods to 30%. In a press release, the White House noted that “other U.S. measures will remain in place,” a vague statement, but one that suggests that per-ton fees imposed on Chinese-built ships arriving in U.S. ports, for example, will continue.
The President called the weekend deal “a win for the United States,” and investors seem to agree. The Vanguard S&P 500 ETF (NYSEMKT: VOO) is up 3% in pre-market trading.
Earnings
In earnings news, S&P 500 component company NRG Energy (NYSE: NRG) reported $2.68 per share in profit on $8.6 billion in revenue this morning, beating on both the top and bottom lines. Media magnate Fox Corporation (Nasdaq: FOX), also a component, reported $1.10 per share on $4.4 billion in sales, likewise beating on top and bottom lines.
Fruit company Dole (NYSE: DOLE) missed on earnings, but said its $0.34 per share profit “was ahead of our own expectations,” and raised its guidance for the full year to $380 million in EBITDA.
Analyst Calls
Jefferies upgraded hotel chains and S&P 500 components Marriott International (Nasdaq: MAR) and Hilton (NYSE: HLT) to buy, predicting “long-term fee, EBITDA and FCF growth” and arguing that “the earnings growth & durability of MAR and HLT justify a higher valuation.”
Morgan Stanley downgraded oil company BP plc (NYSE: BP) to underweight after the stock rose last week on takeover speculation.
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