- Asian Stocks Gain Ahead of Chinese Tech Earnings: Markets Wrap
Asia’s benchmark stock index rose, led by the tech sector, as investors awaited earnings from some of the
largest Chinese technology firms this week. An index of regional tech shares advanced for a fourth day after
US chipmakers rallied when Nvidia Corp. and Advanced Micro Devices Inc. said they would supply
semiconductors to a Saudi Arabian artificial-intelligence firm for a $10 billion data-center project. Taiwan’s
dollar led gains in Asian currencies. The US dollar and Treasuries were little changed. - S&P 500 closes higher Tuesday, wiping out 2025 loss, as Nvidia surges
The S&P 500 rose Tuesday, clawing back into positive territory for the year as investors extended the sharp
gains seen in the previous session due to easing U.S.-China trade tensions. The broad market index gained
0.72% to close at 5,886.55, while the Nasdaq Composite climbed 1.61% to end at 19,010.08. The Dow Jones
Industrial Average lagged, losing 269.67 points, or 0.64%, as a nearly 18% drop in shares of UnitedHealth
pressured the benchmark. Shares of Nvidia advanced 5.6% on news the company would send 18,000 of its top
artificial intelligence chips to Saudi Arabia. Peer chip stocks rose alongside the AI darling, with Broadcom rising
nearly 5% and AMD adding 4%. Tuesday’s gain put the S&P 500 up about 0.1% for 2025. At one point, the index
was down more than 17% for the year, as trade tensions dented investor confidence in equities. - Crude oil climbs 3% on tariff cuts, outlook
Crude oil futures climbed about 3% on Tuesday, lifted by a temporary cut in U.S.-China tariffs and a better than
expected inflation report. Brent crude futures rose $1.67, or 2.57%, to close at $66.63 a barrel. U.S. West Texas
Intermediate (WTI) crude gained $1.72, or 2.78%, to settle at $63.67. The two benchmarks rose by about 4%
or more in the previous session after the U.S. and China agreed on sharp reductions to tariffs for at least 90
days, which also boosted Wall Street stocks and the dollar. “We didn’t participate as much as other markets
did yesterday in the China boom, so we’re catching up today,” said John Kilduff, partner with Again Capital LLC.
“Also the data this morning gives the Fed room to potentially begin making some moves.” A U.S. Labor
Department report on Tuesday said inflation in April was 2.3%, the smallest year-over-year gain in four years,
opens new tab, leading Wall Street firms like JP Morgan Chase and Barclays to cut forecasts of a U.S. recession
in the coming months. The lower inflation number is expected to encourage the U.S. Federal Reserve to keep
interest rates unchanged in the short term, which would encourage consumer spending. Fears of the impact
of tariffs lifting prices were expected to lead to an increase in rates charged by the U.S. central bank for lending
money. The Organization of the Petroleum Exporting Countries and its allies, called OPEC+, are planning to
boost oil exports in May and June, which is seen as possibly limiting oil’s upside. OPEC has raised oil output by
more than previously expected since April, with May output likely to increase by 411,000 barrels per day.
Meanwhile, sources told Reuters that Saudi Arabia’s crude oil supply to China will hold steady in June after
hitting its highest level in more than a year in the previous month after an OPEC+ decision to increase output.
It is the second-largest crude supplier to China behind Russia. - Gold rebounds on bargain-hunting, softer US inflation data
Gold prices rose on Tuesday on bargain-hunting after a sharp loss in the previous day, while softer-than
expected inflation data from the U.S. also lent support. Spot gold rose 0.54% to $3,251.33 an ounce, after
falling as low as $3,207.30 on Monday. U.S. gold futures settled 0.6% higher at $3,247.8. “We had a big
correction in gold on Monday on the news that there is a deal made between the U.S. and China,” Bart Melek,
head of commodity strategies at TD Securities, said. “However, tariffs (on China) are still 30%, which is quite
negative for the economy.” The U.S. and China on Monday said they would pause their tariffs for 90 days.
Following the talks in Geneva over the weekend, the U.S. said it will cut tariffs on Chinese imports to 30% from
145% while China said it would cut duties on U.S. imports to 10% from 125%. Bullion had shattered multiple
record highs in 2025, owing to concerns over economic slowdown following U.S. President Donald Trump’s
sweeping tariffs, strong central bank buying, geopolitical tensions and increased flow into gold-backed
exchange-traded funds. Elsewhere, U.S. consumer price index increased 0.2% last month, the Labor
Department’s Bureau of Labor Statistics said on Tuesday. Economists polled by Reuters had forecast the CPI
would rise 0.3%. “The report does lean slightly friendly for the precious metals markets because it’s not a
problematic inflation report that would give the Federal Reserve pause on cutting interest rates,” Jim Wyckoff,
senior analyst at Kitco Metals, wrote in a note. Financial markets expect the central bank to resume its policy
easing in September. Lower interest rates increase non-yielding bullion’s appeal. - Annual inflation rate hit 2.3% in April, less than expected and lowest since 2021
The U.S. consumer price index rose a seasonally adjusted 0.2% for the month, putting the 12-month inflation
rate at 2.3%, its lowest since February 2021. The core CPI also increased 0.2% for the month, while the year
over-year level was 2.8%. Egg prices tumbled, falling 12.7%, though they were still up 49.3% from a year ago.
While the April CPI figures were relatively tame, the Trump tariffs remain a wild card in the inflation picture,
depending on where negotiations go between now and the summer. - India’s inflation rate slows to 3.16% in April, marking six straight months of decline
India’s headline inflation eased to 3.16% in April, the sixth consecutive month of decline. The reading was lower
than March’s data of 3.34%, and is lower than the 3.27% expected by economists polled by Reuters.
This was the sixth straight month that the inflation fell. Food inflation, which is a key inflation metric in the
country, dipped to 1.78% in April, from March’s figure of 2.69%. Bank of America analysts had said in a May 5
note that food prices will remain “in check,” while core inflation will climb due to higher gold prices. Prices of
the yellow metal have spiked as trade tensions roiled global markets, hitting a record intraday high of $3,498.24
on April 22. - Trump tariffs face major legal hurdle as federal trade court hears challenge
A little-known federal court is set to hear arguments Tuesday in a case challenging President Donald Trump’s
tariffs, putting a key plank of his economic agenda under the legal microscope for the first time. A panel of
three judges at the U.S. Court of International Trade will consider whether Trump exceeded his power when
he enacted steep tariffs on more than 180 countries and territories last month. If they side with the plaintiffs,
the judges could sharply rein in Trump’s ability to unilaterally impose import taxes, one of his preferred
methods of flexing executive power. Audio of the arguments in the Manhattan courtroom will be livestreamed
starting at 11 a.m. ET. The lawsuit was filed in mid-April by five domestic businesses that say they rely on
imported goods not reasonably available to them in the U.S. Their legal complaint argues that the International
Emergency Economic Powers Act — the 1977 law Trump invoked in early April to impose his worldwide
“reciprocal” tariffs — does not actually give the president the power to issue those sweeping duties. The law
gives the president a range of economic powers in a national emergency, including to regulate or ban imports,
though it does not explicitly mention tariffs, according to the Congressional Research Service. - Trump speaks after White House announces $600 billion Saudi investment in U.S
President Donald Trump on Tuesday is delivering remarks after the White House announced Saudi Arabia’s
commitment to invest $600 billion in a series of deals with the United States. Trump’s participation at a U.S.
Saudi investment forum in Riyadh follows a visit with Saudi Crown Prince Mohammed bin Salman. Among the
agreements secured is a nearly $142 billion defense sales deal providing the kingdom with “state-of-the-art
warfighting equipment and services from over a dozen U.S. defense firms,” the White House said. That
commitment is nearly double Saudi Arabia’s 2025 defense budget, which totaled $78 billion. The White House’s
announcement does not say when the defense deal is expected to conclude. Bin Salman, who spoke before
Trump at the investment conference, said the aim is to raise the U.S.-Saudi partnership to $1 trillion across the
military, security, economic and technological sectors. - Trump says U.S. will remove all sanctions on Syria
The U.S. will remove all sanctions on Syria, President Donald Trump announced Tuesday. “I will be ordering the
cessation of sanctions against Syria in order to give them a chance at greatness,” Trump told a packed
auditorium at the U.S.-Saudi Investment Forum in Riyadh, Saudi Arabia, during the first appearance of his four
day visit to the Middle East. “In Syria, which has seen so much misery and death, there is a new government
that will hopefully succeed in stabilizing the country and keeping peace. That’s what we want to see,” he said
in a wide-ranging speech that focused on his own time in office and U.S. relations with the Middle East. “In
Syria, they’ve had their share of travesty, war, killing many years. That’s why my administration has already
taken the first steps toward restoring normal relations between the United States and Syria for the first time
in more than a decade,” Trump said. Syria has been designated a state sponsor of terrorism by the U.S.
government since 1979. Additional U.S. sanctions were imposed on the country in 2004 and again in 2011,
after the regime of then-President Bashar Assad launched a brutal crackdown on anti-government uprisings.
In the roughly 14 years since, the country has been devastated by civil war, sectarian violence and brutal
terrorists attacks, including the Islamic State takeover of parts of the country in 2014 and subsequent Western
led bombing campaign to eradicate the extremist group. - NVIDIA Corp (NVDA US)
The Trump administration is clearing a path for Saudi Arabia and the United Arab Emirates to pursue their
artificial intelligence ambitions, with US tech companies like Nvidia and AMD planning to spend billions of
dollars in the region. The deals will give Saudi Arabia and the UAE wider access to advanced AI chips, with
companies like Nvidia, AMD, and Amazon investing in projects worth billions of dollars, including data centers
and AI infrastructure. The Trump administration is weighing a deal that would allow the UAE to import over a
million advanced Nvidia chips, raising concerns that American hardware could end up in China’s hands. - UnitedHealth Group shares dropped 17.6% after the health insurer suspended its 2025 outlook, citing
higher-than-expected medical costs and said CEO Andrew Witty is stepping down for personal reasons,
effective immediately
Mizuho, Ann Hynes (outperform): Says the suspension of the guidance is surprising. “Given the recent
challenges the company has faced, a change in management was expected”. Leerink Partners, Whit Mayo
(outperform): Says the suspension of the 2025 guide due to a continuation of excessively high care activity “is
more concerning and likely to weigh considerably on forward forecasts and the valuation”. Adds that the CEO
transition to former head Stephen Hemsley “doesn’t strike us terribly surprising in light of recent business
developments and deterioration in investor trust”. “Perhaps the suspended guide is simply for Mr. Hemsley to
settle into the role, figure out trend, and begin the process of reestablishing some credibility with the investor
community”. Many prescription drugs than other wealthy nations. In a Truth Social post on Monday, Trump
wrote: “DRUG PRICES TO BE CUT BY 59%, PLUS! Gasoline, Energy, Groceries, and all other costs, DOWN. NO
INFLATION!!!” “Starting today, the United States will no longer subsidize the healthcare of foreign countries…
and we’ll no longer tolerate profiteering and price gouging from Big Pharma,” Trump said in a press conference
Monday morning. Trump stated that while the U.S. has less than 5% of the world’s population, 75% of drug
companies’ revenue comes from the U.S. The President explicitly called out the weight loss drug makers for
charging significantly more in the U.S. than in other nations. “Ozempic costs 10 times more in the U.S.,” he
said. Ozempic and Wegovy are manufactured by Novo Nordisk (CSE:NOVOb) (NYSE:NVO), and Zebound is made
by Eli Lilly (NYSE:LLY). Novo shares fell 1%, and Eli Lilly traded flat. Both traded up from session lows. - Boeing Co/The (BA US)
Shares of the aircraft company rose 2.5%. Bloomberg reported Tuesday that China has lifted its ban on Boeing
deliveries, citing people familiar with the matter. The company also announced it delivered 45 commercial jets
in April, which is nearly twice the 24 airplanes the company delivered during the same month a year ago. - Sea Ltd. reported a profit that exceeded analysts’ estimates, indicating the company is performing well
against rivals TikTok and Lazada
Sea reported net income of $410.8 million for the first quarter through March, compared with a year-earlier
loss. Analysts predicted $353.4 million on average. Sales climbed 30% to $4.84 billion, roughly in line with
estimates. The company’s online retail arm Shopee has been successful in fending off competitors, with
revenue rising 28% to $3.5 billion, and has been steadily raising commissions for merchants in many core
markets. Sea’s cost-cutting drive, including thousands of job cuts, has helped the company improve its bottom
line, and the company is also investing in new initiatives such as digital finance and logistics to drive long-term
earnings growth. Shares rose 8.2%. - Coinbase Global shares jumped 24% after S&P Dow Jones Indices said the company will join the S&P 500
Index before trading opens May 19
The company will replace Discover Financial Services in the index, S&P Dow Jones Indices said. Bernstein
analyst Gautam Chhugani (outperform): Coinbase is the only crypto company to join the S&P 500. “This event
symbolizes the dramatic turn-around in fortunes for the crypto industry and its rising significance as the frontier
of financial innovation”. Oppenheimer analyst Owen Lau (outperform): Coinbase’s inclusion in the S&P 500 is
“a watershed moment”. “Getting into the S&P 500 not only increases purchases from index funds, but also
puts COIN under a closer radar of non-index funds that benchmark against the S&P 500”. KBW analyst Shreyank
Gandhi: Expect S&P passive funds to purchase 36 million shares of the company as a result of this addition.
“COIN is the first major crypto company to be added to the 500, and this paves the way for other crypto
companies to be added to the index”.
Coinbase Global shares jumped 24% after S&P Dow Jones Indices said the company will join the S&P 500
Index before trading opens May 19
The company will replace Discover Financial Services in the index, S&P Dow Jones Indices said. Bernstein
analyst Gautam Chhugani (outperform): Coinbase is the only crypto company to join the S&P 500. “This event
symbolizes the dramatic turn-around in fortunes for the crypto industry and its rising significance as the frontier
of financial innovation”. Oppenheimer analyst Owen Lau (outperform): Coinbase’s inclusion in the S&P 500 is
“a watershed moment”. “Getting into the S&P 500 not only increases purchases from index funds, but also
puts COIN under a closer radar of non-index funds that benchmark against the S&P 500”. KBW analyst Shreyank
Gandhi: Expect S&P passive funds to purchase 36 million shares of the company as a result of this addition.
“COIN is the first major crypto company to be added to the 500, and this paves the way for other crypto
companies to be added to the index”. - Bayer AG’s shares rose 3.5% after its earnings beat expectations, driven by robust demand for its new
cancer and kidney medicines
The company’s adjusted earnings came in at €4.09 billion, a 7.4% drop from a year earlier, but outpacing analyst
estimates. Bayer confirmed its 2025 outlook, despite uncertainty around tariffs and currencies, and reported
progress in rekindling growth in its pharma division. - First Solar shares soared 22.7% after JPMorgan analyst Mark Strouse said the US budget reconciliation
bill is better than “the more bullish end of investor expectations” for solar, wind and geothermal firms
Strouse said First Solar is the “best positioned” name to benefit from the bill, which updates provisions of the
Inflation Reduction Act. “Our first take is a clear positive against very low expectations, though we caution that
the bill is merely the first step in the process and that potential changes are still possible as the bill navigates
broader Congress”. In the House committee’s proposal, a credit that’s important for solar companies “was
tweaked at most,” said Christopher Niebuhr, a senior research analyst at Beacon Policy Advisors. The credit
would phase out basically a year earlier than it would have under the IRA, and there are some additional
proposed restrictions on foreign entities of concern, Niebuhr told MarketWatch. On the other hand, the House
committee’s proposal aims for a rather quick phaseout for credits that are important for nuclear-power
production and other power sectors, the analyst said.
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