“Successful investing is about managing risk, not avoiding it.”
-Ben Bernanke
Here’s what you need to know this week:
· Stocks extend their winning streak for another week
· Markets post strong gains on reduced tensions with China
First Pause
Stocks gained modestly last week due to easing tensions the trade war. The big breakthrough came in a meeting between President Trump and UK Prime Minister Kier Starmer where both countries agreed to a tariff pause and an outline of a future deal. The initial impact of the deal will fast-track US items through UK customs and reduce barriers on agricultural, chemical, energy and industrial exports. The deal will also reduce auto tariffs to 10% and metals tariffs to zero[1].
While many details are yet to be negotiated, this was the first significant step forward since the tariffs were initially announced on April 2nd. Markets were clearly pleased with the deal and the S&P 500 gained 1.5% in the wake of the announcement. However, the real market mover arrived over the weekend:
Big Pause
The US and China have agreed to a 90-day pause on tariffs while a detailed agreement is negotiated. US Treasury Secretary Scott Bessent met with top Chinese officials in Geneva, Switzerland and announced the pause after more than two days of negotiations. During this pause, US tariffs on Chinese imports will be reduced from 145% to 30% and Chinese duties on US goods will be reduced from 125% to 10%[2]:
The deal also allowed for a few exemptions on rare metals and magnets, both of which are components in high tech manufacturing.
While these tariffs are still notably higher than they were before April 2nd, markets reacted very enthusiastically to this pause. The S&P 500 gained 3.3% and the NASDAQ gained 4.4% on Monday and extended their gains on Tuesday[3]. As of writing, both indexes have erased their losses from the year and are essentially flat year-to-date. Both indexes are still a few percentage points below their all-time highs last seen on February 19th, but for now things appear to be moving in the right direction.
What Else
· President Trump will speak this week at the US-Saudi investment forum
· Robert Prevost was elected as the new pope after four rounds of votes; Prevost is the first American pope in history and took the name Pope Leo XIV
· Hamas released Edan Alexander, the last American hostage in Gaza
· India & Pakistan agreed to a ceasefire after days of escalating hostilities at their shared border
· Former Supreme Court Justice David Souter died at age 85
· The OKC Thunder play game 6 against the Denver Nuggets tomorrow night on ESPN
What We’re Reading
The Soviet Union launched the Kosmos-482 in March of 1972 on an ill-fated voyage to Venus. The Kosmos suffered an engine malfunction shortly after reaching orbital altitude and has spent the last 53 years in a slowly declining orbit. The Kosmos finally returned to Earth this weekend by crash landing into the Indian Ocean. Click below to read about The Kosmos’ original mission and what scientists hope to learn from its debris:
What’s Happening Downtown
The Civic Center Music Hall is hosting an adaptation of William Shakespeare’s Much Ado About Nothingthis Friday through Sunday. Tickets start at $35, click below to learn more:
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Written by: Kane Ogle, CFP®
Steve Beck, Kane Ogle, CFP®, Amber Eduvigen, CFP®, Cale Olbert, CFP®, Brett Valentine, Brandon Ingerson, Jenni Hess