U.S. and China agreed to drastically lower the mutually imposed tariffs, enthusing the equity markets. The Federal Reserve (Fed) chair appraised the markets of the possibility of interest rates being maintained to manage supply shock inflation. President Trump signs executive order to lower pharmaceutical drug costs and punitive action in case of non-compliance. President Trump toured the Middle Eastern countries this week and is expected to announce multiple deals during this period. Armed conflict between India and Pakistan ceased this week, which was facilitated by the U.S.A. President Trump also said that the nuclear deal talks with Iran are progressing well. Russian president Vladimir Putin avoided the highly expected meeting with Ukrainian President Volodymyr Zelensky in Turkey.

Global Updates
  • The MSCI All Country World Index was higher this week driven by the trade optimism after the U.S. and China agreed on a 90-day tariff truce in Geneva. Both countries rolled back their reciprocal tariffs by 115% lowering the U.S. tariffs to 30% and Chinese tariffs to 10%. The equity markets and the dollar rallied following the news and prices of safe haven assets like Gold declined.
  • Richemont reported a higher than expected 7% growth in first quarter sales, driven by higher spending by wealthy customers ahead of the U.S. tariffs. 
  • Novo Nordisk has agreed to the collaborative development of oral molecular drugs for treating obesity and diabetes, with the U.S. biotech firm Septerna.  
  • China has surpassed the U.S. as the leading customer for Canadian crude from the Trans Mountain pipeline. 
  • Alibaba reported lower than expected first quarter revenue of $32.8 billion due to sluggish consumer spending and increased competition. China’s IT stocks were weighed down by the possibility of the U.S. widening the export blacklist of Chinese semiconductor firms 
  • Japan’s real GDP contracted by 0.7% in the first quarter of 2025. The economy was weighed down by declining exports demand and stagnation in private consumption.
  • Crude oil prices benefited from the potential oil demand anticipated due to the lowering of the U.S.-China tariffs. Crude oil prices had been initially weighed down by the supply pressures from OPEC+ and the possible suspension of sanctions on Iran due to the nuclear deal being negotiated by the U.S. with Iran.
U.S. Equity
  • The S&P 500, Dow Jones and Nasdaq indices recovered this week driven by market optimism for the Sino-U.S. tariff truce. The reduced tariffs between the two countries drove up the stock prices for electronics, AI related products and Automobiles.
  • U.S. retail sales were lackluster in April, recording only 0.1% growth in sales. Producer prices contracted by 0.5%, due to the sharp drop in travel costs due to softening demand. Sluggish economic growth is now anticipated in the near future. 
  • Fed chair Jerome Powell cautioned the markets of the possibility of interest rates being maintained higher for longer, to deal with supply shocks and inflation in the near future. The Fed will have to recalibrate and balance its approach to manage the twin mandates of controlling inflation and supporting economic growth. In the long run, the fed still considers its target inflation rate of 2% to be achievable.
  • The UnitedHealth Group’s stock price fell following the news of an investigation by the U.S. Department of Justice for Medicare fraud by its Medicare Advantage business. The health insurance company’s CEO Andrew Witty also stepped down for personal reasons. The company also had to suspend its full year outlook due to higher-than-expected expenditure costs. 
  • Walmart stock price gained after the company reported a higher than expected first quarter Earnings per Share (EPS) of $0.61 on a revenue of $165.99 billion. Walmart reiterated is fiscal 2026 guidance issued in the year beginning. Walmart CEO Doug McMillon cautioned for higher prices in the coming months due to tariffs. 
  • Nvidia’s market cap rose to $3.2 trillion, after it announced a new chip supply deal with the Saudi Arabian AI startup Humain.  
  • President Trump signed an executive order this week, setting up a 30 day deadline for pharmaceutical companies to lower the prices of prescription drugs indexed to the lowest price charged in other developed countries. In case of unsatisfactory action by pharma companies, the Trump administration will impose limits on prices paid by the government. The Republicans have also unveiled plans to reduce $880 billion from the budget allocation for Medicaid 
  • Boeing stock gained after the Chinese government raised the restrictions placed on airlines from taking delivery of planes manufactured in the U.S. The restrictions which had been setup by Beijing were relaxed subsequent to a temporary Sino-U.S. tariff agreement.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index recovered from a decline earlier in the week.
  • The U.S. 10-year Treasury yield rose to 4.406% and the yield on the 2-year note edged up to 3.926% over the week. 
  • The U.S. Dollar Index appreciated slightly to 100.55 this week.

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