🚀 US and China trade agreement

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Market Overview
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Year To Date Performances:

1. Presidents Donald Trump and Xi Jinping struck a one-year trade truce on Thursday, with China agreeing to pause sweeping export controls on rare earth minerals that had escalated tensions between the two nations. In return, the U.S. cut tariffs on Chinese goods tied to fentanyl from 20% to 10%, lowering the overall rate on Chinese imports to about 47%. The agreement also includes China resuming purchases of American agricultural products and a suspension of port fees for one year, though major issues like Nvidia’s chip exports and TikTok’s status remain unresolved. Former U.S. Ambassador Nicholas Burns called the deal an “uneasy truce” in a trade war still far from settled, while Trump described it as a framework that could be “routinely extended” beyond its initial year.

2. Meta’s stock plunged more than 10% after the company raised its 2025 capital spending forecast to as much as $72 billion, overshadowing strong third-quarter results. Despite reporting $7.25 in adjusted earnings per share on $51.24 billion in revenue, a 26% increase from last year, investors balked at CEO Mark Zuckerberg’s plans to “aggressively” invest in AI and prepare for the coming era of superintelligence. Zuckerberg argued that Meta is already seeing returns in its core business and must avoid “underinvesting” in AI infrastructure. The move follows similar spending hikes by Alphabet and Microsoft, as major tech players race to build out AI capacity. Meta also took a $15.93 billion tax charge related to President Trump’s “One Big Beautiful Bill Act,” further clouding investor sentiment despite the company’s strong performance.

3. Alphabet shares jumped 4% after the Google parent reported blowout third-quarter results and raised its AI infrastructure spending forecast to as much as $93 billion. The company posted adjusted earnings of $3.10 per share on $102.35 billion in revenue—its first-ever quarter above $100 billion—easily beating Wall Street expectations. CEO Sundar Pichai highlighted a $155 billion Google Cloud backlog, while executives signalled even higher capital expenditures through 2026. Analysts praised the results as nearly flawless, with Deutsche Bank and Goldman Sachs both raising price targets and crediting Alphabet’s strong position in the AI race. Google’s search revenue also rose 15% year over year, easing concerns that AI could erode its dominance.

   Headlines

   1. Comcast stock fell as the company lost 104,000 broadband customers.

   2. Eli Lilly stock rose as the company beat estimates and raised its forecasts.