Under the new, vague deal, China will dial back tariffs on U.S. goods from 125% to a more flirtatious 10%. Meanwhile, Uncle Sam will lower his own tariff bazooka from 145% to a slightly less absurd 30%. 

Naturally, Wall Street didn’t need to hear any more. The moment “tariff rollback” hit the airwaves, U.S. equity futures soared - S&P 500 futures rocketed up 2.8%, and the Nasdaq 100 surged 3.5%.

Bond traders, not wanting to be left out of the fun, also got frisky. The 10-year Treasury yield hit a one-month high.

Of course, before we all start planning the celebratory trade-themed parade, let’s acknowledge the obvious: this isn’t a solution - it’s a commercial break. A 90-day reprieve doesn’t untangle years of economic bickering, nor does it guarantee that come Day 91, we won’t be right back where we started - only with angrier negotiators and more passive-aggressive press releases.

Chinese officials praised the “important consensus." Meanwhile, Bessent declared there was “substantial progress.”

Negotiations are taking place everywhere. The US and China have discussed the future of their trade relations in Switzerland. India and Pakistan have agreed to a truce in their border dispute. The US and Iran have discussed nuclear issues in Oman. Russia and Ukraine will hold direct talks between Putin and Zelensky in Turkey on May 15.

We are living in the era of negotiators - and not only in geopolitics. Markets, too, are shaped by those who bargain and trade. In this world of traders, the current momentum has shifted back towards technology stocks, many of which have endured a punishing spell. Investors are once again snapping up names like Nvidia, Broadcom and Microsoft. Palantir continues to attract buyers. It's difficult to go against the grain: valuation has taken a back seat. What matters now is the broader narrative - and in this case, it is a scenario many feared had already materialized. The worst has, perhaps, passed. Hence the renewed focus on deal-making, with a paradox at its heart: what if the US economy avoids recession? What if border closures don’t drive inflation as high as anticipated? Appetite for risk has returned - even as the risks themselves remain as elevated as they’ve been in years.

Investors have not entirely given up on Donald Trump’s economic pronouncements. If they had, markets wouldn’t be rallying. Instead, it appears they are placing their confidence in Scott Bessent - the man who, by all accounts, has been handed the economic steering wheel by the Trump camp. Meanwhile, strategists at the major investment banks seem increasingly adrift. They began the year with ambitious equity targets stretching into late 2025, only to slash them in a bout of panic. Since mid-April, the tide has turned again, with upward revisions now the order of the day. And yes, you might well ask: what is the point of setting year-end targets if they’re simply revised every few weeks? I won’t answer that - but I’m with you.

While strategists contort themselves in an effort to map a path through increasingly erratic markets, one figure had remained largely unmoved - until last week: Warren Buffett. He deserves a passing thought this morning. Judging by the flurry of near-obituary columns that greeted news of his retirement, the most recognisable grandfather in global markets must have briefly wondered whether he was still alive. One imagines he may have smiled, recalling Mark Twain’s dry response to premature reports of his demise in 1897: “The reports of my death are greatly exaggerated.” (Twain, incidentally, went on to live another 13 years.)

Buffett used his retirement announcement to underscore the risks he sees in current US economic policy - concerns the equity markets appear content to overlook, even as other corners of finance have not. US bond yields remain elevated, and the VIX volatility index is stubbornly refusing to dip below the 20-point threshold. But for the moment, it is the bulls who are making themselves heard.

In other news, Donald Trump has confirmed that he will sign an executive order to reduce the prices of prescription drugs and pharmaceutical products by 30-80%, based on the most-favored-nation principle (i.e., the same price as the country that pays the lowest price in the world).

On the economic agenda: it's shaping up to be a busy week. On Tuesday, all eyes will be on US inflation figures for April. On Thursday, the UK will kick things off with its first-quarter GDP, followed by retail sales and the producer price index in the US. Fed Chair Jerome Powell will also speak in Washington. Finally, on Friday, we head to Asia for Japanese growth, before returning to the US for the University of Michigan's preliminary consumer confidence index.

On the corporate calendar: the earnings season is coming to an end, with 90% of S&P 500 companies having already reported their results. But it's not completely quiet yet. Cisco, Walmart, Alibaba, Allianz, Compagnie Financière Richemont, Applied Materials and Deutsche Telekom are still expected to stir things up a bit on the markets.

Today's economic highlights:

See the full calendar here.

  • Dollar index: 101,345
  • Gold: $3,228
  • Crude Oil (BRENT): $66.22 (WTI) $63.40
  • United States 10 years: 4.41%
  • BITCOIN: $104,230

In corporate news:

  • OpenAI and Microsoft renegotiate partnership terms for potential future IPO.
  • US Government plans executive order to reduce certain drug prices.
  • Google settles Texas data privacy lawsuit for $1.38 billion.
  • The DOGE's arbitrary awarding of a contract to Workday has been overturned.
  • Pan American Silver will acquire MAG Silver for approximately $2.1 billion.

See more news from UK listed companies here

Analyst Recommendations:

  • Antero Resources Corporation: Gerdes Energy Research LLC downgrades to neutral from buy with a target price raised from USD 41 to USD 42.
  • Astera Labs, Inc.: CITIC Securities Co Ltd upgrades to buy from add with a target price reduced from USD 108 to USD 100. 
  • Hilton Worldwide Holdings Inc.: Jefferies upgrades to buy from hold with a price target raised from USD 228 to USD 296.
  • Insulet Corporation: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Marriott International, Inc.: Jefferies upgrades to buy from hold with a target price raised from USD 226 to USD 303.
  • Micron Technology, Inc.: GF Securities Co. Ltd. downgrades to underperform from buy with a target price reduced from USD 135 to USD 74.
  • Monster Beverage Corporation: CICC upgrades to outperform from neutral with a price target raised from USD 56 to USD 65.
  • On Semiconductor Corporation: Morgan Stanley upgrades to equal weight from not rated with a target price of USD 39.
  • Range Resources Corporation: Gerdes Energy Research LLC downgrades to neutral from buy with a target price of USD 41.
  • Robinhood Markets, Inc.: William O'Neil & Co Incorporated upgrades to buy from dropped coverage.
  • Sandisk Corporation: GF Securities Co. Ltd. downgrades to underperform from buy with a target price reduced from USD 86 to USD 31.
  • Target Corporation: Bernstein downgrades to underperform from market perform with a target price reduced from USD 97 to USD 82.
  • Warner Music Group Corp.: Goldman Sachs downgrades to neutral from buy with a target price reduced from USD 35 to USD 28.
  • Burlington Stores, Inc.: Barclays maintains its overweight recommendation and reduces the target price from 329 to USD 254.
  • Carvana Co.: Jefferies maintains its hold recommendation with a price target raised from USD 230 to USD 280.
  • Coty Inc.: Kepler Cheuvreux maintains its hold recommendation with a price target reduced from 7 to EUR 4.50.
  • Crowdstrike Holdings, Inc.: Wedbush maintains its outperform rating and raises the target price from USD 395 to USD 475.
  • Deckers Outdoor Corporation: Barclays maintains its overweight recommendation and reduces the target price from 231 to USD 129.
  • Lyft, Inc.: Jefferies remains at a hold recommendation with a price target raised from USD 12 to USD 16.
  • Olin Corporation: Morgan Stanley maintains its underweight recommendation and reduces the target price from 28 to USD 20.
  • The Gap, Inc.: Barclays maintains its overweight recommendation and reduces the target price from 33 to USD 26.
  • The Mosaic Company: Wells Fargo maintains its equalweight recommendation and raises the target price from 28 to USD 35.
  • V.f. Corporation: Barclays maintains its overweight recommendation and reduces the target price from 34 to USD 19..