US & China Tariff Rollback Boosts Stocks, Inflation Concerns Remain

US-China Trade Relations Reset

• 🤝 The U.S. and China have agreed to a 90-day rollback of tariffs against each other, signaling a de-escalation in trade tensions.
• 💡 President Trump described the agreement as a "total reset" of the US-China relationship, aiming to avoid harming China and addressing its economic issues.
• ⚠️ Despite the positive step, the deal reportedly met nearly all of China's demands, including the suspension of a 34% reciprocal tariff rate.

Economic Impact and Market Reaction

• 📈 Global stocks have recovered losses following the tariff announcement, with the S&P 500 surging 3.25% and the Nasdaq rallying 4.33%.
• ✈️ As a concession, China has lifted a month-long ban on its airlines taking deliveries of Boeing planes.
• 🏦 Wall Street figures like Ken Griffin of Citadel view the agreement as an important moment, emphasizing the potential for negotiated action and finding common ground.

Global Trade and Investment Outlook

• 🌍 President Trump is touring the Middle East, discussing potential trade agreements with the European Union, Japan, Indonesia, and Taiwan.
• 🇺🇸 Treasury Secretary Scott Bessent highlighted productive discussions and a "very good proposal" from Taiwan.
• 📊 Goldman Sachs Group has raised its price target for the S&P 500 to 6500, citing eased tariff concerns, though the broader earnings outlook remains uneven.

Inflation and Economic Indicators

• ⚠️ Investors are also focused on the upcoming Consumer Price Index (CPI) report for April, which may show evidence of rising prices due to import taxes.
• 🚗 While gas prices fell, economists anticipate increases in autos and some consumer goods, with larger impacts expected in May and June.
• 🎯 The report will also monitor traditional inflation sources like housing to assess progress towards the Federal Reserve's 2% target.