From Yahoo Finance: 2025-05-09 16:33:00

World markets traded steadily this week as the Trump administration secured potential trade deals, and investors were optimistic about US-China trade talks. The S&P 500 and Nasdaq recovered, Germany’s DAX hit new highs, and Japanese stocks had their best week in two years. China implemented stimulus measures, the Bank of England and Japan cut rates, and the US Federal Reserve maintained stability. Earnings growth is at 14%, with more negative forecasts for Q2 than positive. Despite trade optimism, Wall Street and Treasury yields stayed flat due to erratic US administration behavior. Tariffs are expected to be lower than originally proposed but higher than pre-Trump levels. Economist Phil Suttle estimates the US tariff rate will settle at 22%, a four-fold increase since Trump took office. Goldman Sachs economists warn of a potential economic slowdown. Investors are torn between bullish optimism and bearish concerns about tariffs. Geneva trade talks between the US and China could have significant market impact on Monday. Elon Musk’s efforts to cut federal spending have fallen short, leading to increased deficit projections. Morgan Stanley economists predict a 7.1% budget deficit by 2026, causing investor unease. Monday’s market movers include US-China trade talks, Chinese inflation data, India inflation numbers, and Japan trade data. Opinions expressed by the author do not reflect Reuters News views. Trading Day newsletter offers daily market insights and analysis.



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