U.S. Market Rally Halts Amid Growing Skepticism About US-China Trade Talks

Scott Peters
09 May, 2025
New York City

Wall Street indexes lacked direction in Friday's trading as investors reviewed the latest batch of earnings. 

The S&P 500 index edged down 0.1%, and the Nasdaq Composite inched lower 0.2% ahead of US-China trade talks this weekend in Switzerland. 

Investors are anticipating talks to yield results, reflecting a view that China has sharply reduced its reliance on the U.S. market over the last ten years. 

Despite the increase in tariffs during the first Trump administration, China's exports jumped more than 50% between 2016 and 2020. Moreover, the share of direct shipments to the U.S. declined from as high as 25% to below 19% in the period. 

China's manufacturing companies have expanded their production bases to Mexico, Vietnam, Thailand, Bangladesh, and ASEAN-member nations, avoiding high tariffs on direct shipments from China. 

However, that strategy of diversifying the supply base by the Chinese companies is under severe strain under the new tariff regime proposed by the current Trump administration. 

If a trade agreement is not struck by the end of June, investors fear that as many as 100,000 small businesses could fold by the end of this year, and consumers are likely to face higher prices and fewer choices as early as July. 

 

Week Ahead 

In the week ahead, investors are looking ahead to the monthly budget statement, inflation data, and housing market activity reports. 

Producer prices, retail sales, jobless claims, industrial production, and business inventories are on tap to be released on Thursday.

Building permits, housing starts, export and import prices, and foreign bond investment are scheduled to be released on Friday.

On the earnings front, investors are anticipating quarterly updates from more than 300 companies, including results from Cisco Systems, NRG Energy, Simon Property, JD.com, Walmart, Alibaba Group, Deere & Co., Applied Materials, Ross Stores, and Bath & Body Works.

 

Commodities, Currencies, Indexes, Yields

The S&P 500 index increased 0.3% to 5,681.39, the Nasdaq Composite edged up 0.6% to 18,035.09, and the Russell 2000 index advanced 0.3% to 2,032.94.

The yield on 2-year Treasury notes edged lower to 3.88%, 10-year Treasury notes decreased to 4.37%, and 30-year Treasury bonds advanced to 4.86%.

WTI crude oil increased $0.68 to $60.60 a barrel, and natural gas prices edged higher by $0.14 to $3.73 a thermal unit.

Gold increased by $15.01 to $3,331.42 an ounce, and silver edged up by $0.11 to $32.54.

The dollar index, which weighs the US currency against a basket of foreign currencies, decreased by 0.28 to 100.36, and it traded at the lowest level since April 2022.

 

U.S. Movers

Lyft Inc. soared 21.4% to $15.83, and the ride-hailing service provider said net income swung to a profit in the latest quarter. 

Revenue in the first quarter increased 14% to $1.45 billion, net income was $2.57 million from a loss of $31.54 million, and diluted earnings per share swung to a profit of 1 cent from a loss of 8 cents. 

The company's board authorized expanding the stock buyback program to $750 million from $500 million.  

Expedia Group Inc. declined 8.2% to $155.09, and the travel and booking platform operator reported mixed results in the first quarter.  

Revenue edged up to $2.99 billion from $2.89 billion, net loss widened to $200 million from a loss of $135 million, and diluted loss per share expanded to $1.56 from a loss of 99 cents a year ago.

Adjusted earnings, after excluding certain one-time items, were 40 cents per share, ahead of market expectations of 32 cents. 

The company repurchased approximately 1.7 million shares for $330 million during the quarter and paid a quarterly dividend of 40 cents per share on March 27.

Monster Beverage Corp. increased 1.8% to $61.23, and the energy drink maker reported weaker-than-expected quarterly results. 

Revenue in the first quarter declined 2.3% to $1.85  billion from $1.9 billion, net income was nearly flat at $442.9 million, and diluted earnings per share eased to $8.51 from $8.59 a year ago. 

The beverage company said energy drink case sales increased to $213,100 from $211,430 a year ago.