Trump's trade agreement with China is another big win for investors

Business Insider

13-05-2025

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In today's big story, the stock market popped after a temporary trade agreement between the US and China was reached. We look at what some top Wall Street minds expect going forward.
What's on deck
Business: Costco's gold bars are such a hot commodity, the retailer put new limits on buying them.
But first, another big win for investors.
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The big story
Tariff turnaroundPresident Donald Trump's tariffs had investors heading for the hills. A little over a month later, they can't come back fast enough.
An agreement between the US and China to significantly reduce tariffs for 90 days sent the market skyrocketing. Major indexes gained considerable ground, erasing the losses from Trump's April 2 "Liberation Day."
In all honesty, we should have seen this coming. On May 8, Trump told a press pool at the White House, "You better go out and buy stock now."
It was the second time in the past few months that Trump has telegraphed market-moving news coming down the pipeline by urging people to buy stocks.
Now, investors who followed Trump's advice are sitting pretty. Tech stocks, including the all-important Magnificent Seven, were up big since many have supply chains and/or customers tied to China.
And stocks weren't the only thing heading in the right direction. The progress made on US-China trade talks has people less fearful of a recession. Betting markets dropped the chances down to 40% from 52%, where it was last week.
Jennifer Sor/BI
That's what some of the brightest minds on Wall Street tried to think through when reacting to the news. Here's a rundown of their thoughts.
Not to be a party pooper, but the trade agreement reached between the US and China is still only temporary. The two sides must iron out many issues before anything permanent is established.
Let's not forget the actual tariffs. Both sides have significantly lowered the trade taxes against each other (China 125% to 10%, US 145% to 30%), but the risk remains. Fed Gov. Adriana Kugler said Monday that the current trade policies still "appear likely to generate significant economic effects even if tariffs stay close to the currently announced levels."
Roger Altman, founder of investment bank Evercore, estimated the US's overall tariff rate is around 14% compared to 3-4% during President Joe Biden's administration.
All of that is to say, the concerns economists have always had about Trump's trade policy — a rise in inflation, slower economic growth — are still very much on the table.
3 things in markets
Getty Images; Jenny Chang-Rodriguez/BI
1. How Goldman Sachs is supercharging employees with AI. The bank's GS AI Platform has been growing its suite of tools aimed to boost employees' productivity. BI spoke with multiple Goldman executives over the past year and compiled intel on five of its AI tools. Here's everything we know.
2. Retirement travel dreams, deferred. BI spoke to several retirees who planned on spending their golden years traveling. Now, between rising costs and financial concerns, they said they're either finding creative ways to afford it or rethinking their plans altogether.
3. Another House representative made money on tariff turmoil. It's not just Marjorie Taylor Greene: Democratic Rep. Jared Moskowitz bought tens of thousands of dollars of stock during the market chaos in April. Both lawmakers say their trades were made by an outside financial advisor.
3 things in tech
1. Amazon is getting back together with its (Fed)Ex. The two companies, which split in 2019, signed a partnership deal in late February, according to an internal document obtained by BI. Amazon cited FedEx's "cost favorability" over UPS, which previously said it would reduce its shipping volume for Amazon packages over profitability concerns.
2. The tortoise and the hare. Last week, Bill Gates announced plans to close the Gates Foundation in the next 20 years. Instead of the foundation winding down spending, he's ramping it up. It's a stark contrast to Elon Musk's chainsaw-wielding approach with DOGE — and Musk could take some notes.
3. The women powering little tech in 2025. Meet BI's Seed 40, our annual list of the best women early-stage investors with a knack for spotting and working alongside founders. This year's honorees have placed bets across some of 2025's hottest verticals, from AI to health tech.
3 things in business
Hugo Herrera for BI
1. Tariffs are going to hit Gen Z especially hard. In the face of tariff price hikes, Gen Z is already disadvantaged by having less wealth than other generations. But tariffs could hit some Gen Z-specific products to the point of extinction, from Korean beauty products to anxiety meds.
2. Costco tries to stem the gold rush. The wholesaler has been putting limits on purchases of gold and other precious metals in recent months. Gold prices have been on a tear this year, and even with earlier restrictions, Costco said its inventory had sold out "within a few hours."
3. Temu's left out of Trump's tariff reprieve. Although goods from China are being taxed at 30% and not 145% for the next 90 days, Temu and Shein are still subject to high duties which remain on small packages shipped directly from China. Fortunately, Temu has a workaround.
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What's happening today
The Business Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York. Hallam Bullock, senior editor, in London. Grace Lett, editor, in Chicago. Amanda Yen, associate editor, in New York. Lisa Ryan, executive editor, in New York. Ella Hopkins, associate editor, in London. Elizabeth Casolo, fellow, in Chicago.