Weekly Market Mornings (May 11) Investors Focus on U.S.-China Trade Meeting

Last Week’s report

Economic Reports

The ISM Services PMI rose to 51.6 in April 2025, bouncing back from a nine-month low of 50.8 in March and surpassing expectations. New orders and inventories grew faster, while business activity remained in expansion mode. Employment continued to shrink, but at a slower pace. Supplier deliveries slowed, and price pressures spiked to their highest level since February 2023. Concerns over tariffs focused more on actual price increases rather than future uncertainty, and federal budget cuts were still seen as a challenge. Despite these pressures, overall conditions showed signs of improvement.

The FOMC chose to keep interest rates unchanged, signaling caution amid economic uncertainties. Fed Chair Jerome Powell emphasized that inflation and trade risks remain a concern, and the central bank will continue monitoring conditions before making any policy changes. 

Fed Chair Jerome Powell reassured that the U.S. economy remains strong despite growing risks from inflation and unemployment. He highlighted uncertainty around the long-term impact of tariff policies and explained that the sharp drop in first-quarter GDP was due to unusual trade fluctuations.

Powell emphasized that the Fed remains independent and will not lower interest rates based on political pressure. He also acknowledged that ongoing trade negotiations could significantly shape the economic outlook, though their final impact remains unclear.

Jobless claims fell last week, reflecting continued labor market resilience. The Labor Department reported 228,000 new filings, down from 241,000, beating forecasts. Continuing unemployment claims also dropped to 1.88 million. Despite concerns over the new tariffs, economic data has yet to show major negative impacts, with April job additions exceeding expectations and the unemployment rate holding at 4.2%. 

Earnings Reports

Palantir Technology

Palantir (PLTR) reported strong Q1 2025 results, with revenue rising 39% year-over-year to $884 million. U.S. revenue jumped 55%, driven by a 71% surge in commercial revenue and a 45% increase in government contracts. 

The company raised its full-year forecast, expecting 36% revenue growth. U.S. commercial contract value hit a record $810 million, up 183%. Also, earnings per share met estimates.

Despite strong revenue growth and raised guidance, Palantir’s stock fell after the earnings report. While revenue exceeded expectations, EPS only matched estimates, disappointing investors who expected a bigger surprise. Additionally, the stock had already surged over 60% this year, leading to profit-taking.

Technically, PLTR pulled back after hitting its all-time high of $125. A divergence with the RSI suggests a potential drop toward $98. However, if it breaks past $125 and holds, further gains could follow. 

Advanced Micro Devices

Advanced Micro Devices (AMD) reported strong Q1 2025 results, with revenue reaching $7.4 billion and EPS surpassing expectations. 

The Data Center segment grew 57% YoY, driven by high demand for AMD EPYC CPUs and Instinct GPUs. Client revenue jumped 68% thanks to strong Ryzen processor sales, while Gaming revenue fell 30%. 

AMD’s stock rose 5% on the positive earnings, but concerns remain over competition, export restrictions, and economic challenges. 

Technically, AMD is in a downtrend but trying to break above its trendline. If it surpasses $116, the bearish phase could end, leading to an uptrend or consolidation.

Walt Disney

Disney (DIS) reported strong Q2 2025 earnings, beating expectations with 7% revenue growth and a 20% rise in adjusted EPS. 

The stock jumped 14% on the news, boosted by streaming success and Disney+. 

Some investors see potential in the company’s new theatrical releases and ESPN’s upcoming direct-to-consumer service.

Uber

Uber (UBER) reported 14% revenue growth in Q1 2025 but fell short of expectations. However, EPS of $0.83 beat estimates, and trips surged 18% to 3 billion. Also, net income totaled $1.8 billion, boosted by equity investments.

Uber’s stock fell despite solid Q1 2025 earnings. Revenue and gross bookings missed expectations, disappointing investors. While the company gave a positive Q2 outlook, some hoped for stronger forecasts. Economic concerns and consumer spending worries also affected sentiment. Additionally, a decline in freight revenue raised concerns about that segment.

Technically, UBER hit an all-time high of $86 but then corrected. If it climbs past $87, more gains could follow. But if it drops below $78, a deeper decline toward $70 is possible.

Indices

Indices’ Weekly Performance:

Last week, the S&P 500 dropped 0.5%, mainly due to losses in health care and communication services, despite gains in industrial stocks.

The stock market struggled because of concerns over the Trump administration’s tariff policies. 

On Wednesday, Federal Reserve Chair Jerome Powell warned that if the announced tariff increases continue, they could lead to higher prices, slower economic growth, and more unemployment.

However, there was some positive news on Thursday when the US and UK reached a trade agreement. 

On Friday, President Trump suggested that tariffs on Chinese imports could be lowered to 80% from the current 145%, though many analysts still see 80% as a high rate. 

Talks between US and Chinese officials are expected this weekend, but no further agreements have been announced.

Technically, SPX has broken its downtrend and is nearing a key resistance zone (5665–5685). If it moves past this level, it could rise toward 5800, with 5780 as another barrier. But if resistance holds, falling below 5578 could signal a deeper decline. 

Stocks

Sector’s Weekly Performance:

Last week, health care had the biggest drop, falling 4.6%, followed by a 2.17% decline in communication services. 

HealthCare: Vertex Pharmaceuticals (VRTX) shares fell 15% after the company reported lower-than-expected earnings and revenue for the first quarter. 

Communication services: Match Group (MTCH) shares dropped 11% as the company announced plans to reduce its workforce by 13%.

On the positive side, industrials rose 1.1%, followed by smaller gains in consumer discretionary (1%), and energy (0.7%). Technology and financials had slight increases.

Rockwell Automation (ROK) shares surged 16% this week after reporting better-than-expected results for its second fiscal quarter and raising its full-year earnings forecast. Also, Walt Disney (DIS) surged 14.5% after strong earnings, fueled by growth in streaming and theme parks

Top Performers

Last week saw remarkable stock market performance, with several companies standing out as top gainers:

• Walt Disney (DIS): Surged 14.5% after strong earnings, fueled by growth in streaming and theme parks.
• MercadoLibre (MELI): Gained 7.4% as its fintech expansion boosted investor confidence.
• Applovin (APP): Rose 6.8% after better-than-expected earnings, driven by strong mobile ad tech demand.
• Micron Technology (MU): Climbed 6.4% on increased AI-related memory chip demand.
• MicroStrategy (MSTR): Up 5.5% as Bitcoin prices rallied, benefiting its crypto holdings.
• Boeing (BA): Added 5.1% following new aircraft orders and production updates.
• NextEra Energy (NEE): Grew 4.8% as investors bet on continued renewable energy expansion.
• Texas Instruments (TXN): Rose 4.7% on optimism for semiconductor demand in key industries.

Commodity

Weekly Performance of Commodities:

Gold (XAUUSD) prices rose last week as investors sought safety amid global tensions and economic uncertainty. The price briefly tested $3,500 per ounce but pulled back, possibly entering a consolidation phase. 

Chinese investors played a major role in the surge, with record trading volumes in Shanghai gold futures and strong inflows into Chinese gold ETFs.

Technically, XAU/USD is still following its upward trend. If the price drops below $3200, it could fall further. But if it stays above the trendline, it could continue rising toward $3400. The key thing to watch is whether the trendline holds or breaks.

WTI Crude oil prices rose $61 per barrel, gaining over 4% for the week as hopes for better trade relations between the US and China boosted market confidence.

Optimism grew after news that US and Chinese officials will meet soon to discuss trade. Strong Chinese exports and a rise in crude oil imports also supported prices. A new trade deal between the US and UK added to the positive outlook.

However, some concerns remain. OPEC+ plans to increase oil production, which could push prices down. At the same time, tighter US sanctions on Iran may limit supply, adding uncertainty to the market.

Forex

Weekly Performance of Major Foreign Exchange Pairs:

USD/JPY: The U.S. dollar has been gaining against the Japanese yen for three weeks, though it saw a slight dip in the latest session.

GBP/USD: The British pound recovered after losses earlier in the week, posting a weekly gain after UK cut interest rates.

USD/CHF: The U.S. dollar has been rising against the Swiss franc for four weeks, though it edged slightly lower in the latest session.

EUR/USD: The euro has been struggling against the U.S. dollar, continuing its downward trend for the third straight week.

The euro continued to decline as the U.S. dollar strengthened, with EUR/USD falling to $1.1235 after Fed Chair Powell ruled out immediate rate cuts. 

The euro continued to decline as the U.S. dollar strengthened, with EUR/USD falling to $1.1235 after Fed Chair Powell ruled out immediate rate cuts. Traders are watching for a possible drop below $1.12, especially if inflation data comes in higher than expected. The pair has struggled after failing to break above $1.15 earlier this month, signaling a potential further downturn.

Crypto

Crypto Market Weekly Performance:

Bitcoin (BTCUSD) surged past $104,000 after President Trump announced a trade deal with the UK, removing retaliatory tariffs. Traders speculated that China could be next, fueling optimism that global trade tensions might ease. The news sent markets into risk-on mode, with Bitcoin jumping from $98,000 to $104,300 and Ethereum gaining 25%. 

Investors hope Trump’s next move could further boost crypto, with Bitcoin eyeing the $110,000 mark. The rally follows a four-day uptrend after the Fed kept interest rates unchanged.

Technically, BTC is nearing a key price level close to its highest value ever. If it rises past $110,000 and stays strong, it could keep going up. But if it struggles to break through, it might drop below $100,000 instead. 

Next Week’s Outlook

Economic Events

Washington and Beijing’s trade talks will stay in the spotlight this weekend as U.S. Treasury Secretary Bessent and trade negotiator Greer meet China’s Vice Premier He Lifeng in Switzerland.

Federal Reserve officials’ speeches will take center stage, with Chair Jerome Powell set to address key economic concerns. 

The U.S. economic calendar is packed, with April inflation figures expected to reflect the first full month of President Trump’s tariff policies. 

Consumer prices may rise 0.3% month-over-month, reversing March’s 0.1% drop, while core CPI is also forecast to increase by 0.3%. 

Producer prices could edge up 0.2% after a 0.4% decline, and import prices are likely to fall 0.4%, following a previous 0.1% dip.

Other major indicators include the preliminary May reading of the University of Michigan Consumer Sentiment Index, which could show a modest recovery after reaching a near three-year low in April. 

Retail sales

are projected to inch up 0.1% in April, following a 1.5% spike in March as consumers rushed to buy vehicles before new tariffs took effect. 

Investors will also track industrial production, business inventories, housing data, capital flows, federal finances, and regional manufacturing indexes like the New York Empire State and Philadelphia Fed surveys.

Earnings Events

Traders will monitor the earnings calendar as major companies like Alibaba (BABA), Applied Materials (AMAT), Cisco (CSCO), Deere & Co.(DE), Target (TGT), and Walmart (WMT) prepare to release key reports.