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Los Angeles Times
3 days ago
- Business
- Los Angeles Times
US stocks drift and Chinese markets rise as trade talks start between the world's largest economies
NEW YORK — U.S. stocks drifted through a quiet Monday as the world's two largest economies began talks on trade that could help avoid a recession. The Standard & Poor's 500 edged up by 0.1% and is within 2.3% of its record, which was set in February. The Dow Jones Industrial Average slipped by 1 point, which is well below 0.1%, and the Nasdaq composite added 0.3%. Officials from the United States and China met in London to talk about a range of different disputes that are separating them. The hope is that they can eventually reach a deal that will lower each's punishing level of tariffs against the other, which are currently on pause, so that the flow of everything from tiny tech gadgets to enormous machinery can continue. Hopes that President Trump will lower his tariffs after reaching such trade deals with countries around the world have been among the main reasons the S&P 500 has rallied so furiously since dropping roughly 20% from its record two months ago. It's back above where it was when Trump shocked financial markets in April with his wide-ranging tariff announcement on what he called 'Liberation Day.' This may be the shortest sell-off following a shock of heightened volatility on record, according to Parag Thatte, Binky Chadha and other strategists at Deutsche Bank. Typically, stocks take around two months to bottom following a spike in volatility and then another four to five months to recover their losses. This time around, stocks have basically made a round trip in less than two months. But nothing is assured, of course, and that helped keep trading relatively quiet on Wall Street Monday. Some of the market's biggest moves came from the announcement of big buyout deals. Qualcomm rallied 4.1% after saying it agreed to buy Alphawave Semi in a deal valued at $2.4 billion. IonQ, meanwhile, rose 2.7% after the quantum computing and networking company said it agreed to purchase Oxford Ionics for nearly $1.08 billion. On the losing side of Wall Street was Warner Bros. Discovery, which flipped from a big early gain to a loss of 3% after saying it would split into two companies. One will get Warner Bros. Television, HBO Max and other studio brands, while the other will hold onto CNN, TNT Sports and other entertainment, sports and news television brands around the world, along with some digital products. Tesla recovered some of its sharp, recent drop. The electric vehicle company tumbled last week as Elon Musk's relationship with Trump broke apart, and it rose 4.6% Monday after flipping between gains and losses earlier in the day. The frayed relationship could end up damaging Musk's other companies that get contracts from the U.S. government, such as SpaceX. Rocket Lab, a space company that could pick up business at SpaceX's expense, rose 2.5%. All told, the S&P 500 rose 5.52 points to 6,005.88. The Dow Jones Industrial Average slipped 1.11 to 42,761.76, and the Nasdaq composite rose 61.28 to 19,591.24. In stock markets abroad, indexes were modestly lower in Europe after rising across much of Asia. Chinese markets climbed even though the government reported that exports slowed in May, growing 4.8% from a year earlier after jumping more than 8% in April. China also reported that consumer prices fell 0.1% in May from a year earlier, marking the fourth consecutive month of deflation. Stocks rallied 1.6% in Hong Kong and rose 0.4% in Shanghai. In the bond market, the yield on the 10-year Treasury eased to 4.48% from 4.51% late Friday. It fell after a survey by the Federal Reserve Bank of New York found that consumers' expectations for coming inflation eased a bit in May. That provides some relief for the Fed, which has been keeping its main interest rate steady as it waits to see how much Trump's tariffs will raise inflation and how much they will hurt the economy. A persistent increase in expectations for inflation among U.S. households could drive behavior that creates a vicious cycle that only worsens inflation. Economists expect a report coming on Wednesday to show inflation across the country accelerated last month to 2.5% from 2.3%. Choe writes for the Associated Press.
Wall Street Journal
05-04-2025
- Business
- Wall Street Journal
The S&P 500's Two-Day, 10%-Plus Plunge Was One for the History Books
How often do we see selloffs like this? Hardly ever. President Trump's tariff blitz sent the S&P 500 careening 10.5% lower over Thursday and Friday. Only three other times since World War II has the index or its precursor suffered a two-day drawdown of 10% or more, Deutsche Bank strategists led by Parag Thatte said in a note. Those selloffs came in: March 2020, during the Covid-19 panic; November 2008, during the global financial crisis; and October 1987, with the Black Monday crash.
Yahoo
10-02-2025
- Business
- Yahoo
Deutsche Bank Predicts Potential 10% Pullback as S&P 500 Remains Stable
Feb 10 - The strategists at Deutsche Bank have examined how the S&P 500 benchmark index maintains stability in challenging market conditions. The index has managed to stay within plus or minus 2% while maintaining its stable position during the past three months since its post-election peak. The market demonstrates stability while trade policy evolves robustly and central bank interest rates change because of economic heat and rising inflation and manufacturing signs of economic recovery appear. Market resistance has been supported by positive earnings developments in both mega-cap and technology stocks, according to Deutsche Bank strategists Parag Thatte and Binky Chadha. The analysts point out that worsening trade tensions possess the potential to paradoxically create new trade disputes while sparking a substantial market equity drop. Geopolitical disturbances have traditionally triggered swift marketplace decline followed by swift market rebounds just before conflict resolution occurs. Analysts predict the Trump administration will reduce trade tension once the equities market declines by 10 percent. The cyclical condition continues to provide a beneficial framework because early indications of manufacturing growth are strengthening. Strong fundamental economic conditions maintain the market's resistance to ongoing threats despite potential trade tensions. Investors must exercise prudence because market adjustments to geopolitical changes, together with expected upcoming market volatility, demand careful consideration. This article first appeared on GuruFocus. Sign in to access your portfolio
