Trade deal progress dominated last week’s stock market and promises to be influential in the week ahead. In Switzerland this weekend, Treasury Secretary Scott Bessent started a dialogue over tariffs with Chinese officials. On Sunday, Bessent said the talks were productive and more details would be forthcoming at a Monday briefing. The Treasury secretary said President Donald Trump has been “fully informed” on what was discussed. Trump on Saturday called the China talks a “total reset. On Friday, a day after announcing at the White House a trade with the UK, he posted on social media that 80% tariffs on Chinese imports “seems right” to him. But he said he would leave that to Bessent. An 80% tariff rate is better than the 145% that Trump put on China, but still high. What became clear in the U.K. agreement was that the 10% tariffs globally are the floor, and as Trump put it, tariffs for some countries looking to make trade deals with the U.S. could be much higher. Tariffs also were a major focus of Federal Reserve Chairman Jerome Powell ‘s post-May meeting news conference last Wednesday. Powell said that if “large increases in tariffs” stick, the job market could slow and inflation could rise. He said that neither side of the Fed’s dual mandate of maximizing employment and fostering price stability is signaling the need to cut rates, yet. The Fed chief said he’s content to keep holding interest rates steady, as central bankers did again last week, until the trade picture becomes clearer. The market slipped Friday on caution about what the weekend talks with China might bring. For the week, the S & P 500 dropped nearly 0.5%, its first weekly decline in the past three. The S & P 500, as of Friday’s close, finished 2% away from where it ended on Election Day, Nov. 5. With all the trade noise and gyrations, the market has come nearly full circle . The Nasdaq and Dow both saw modest weekly losses. All three stock benchmarks dropped for the first week in the past three. There were no Club trades last week in a market that’s spent the past 11 sessions in overbought territory, according to the S & P Short Range Oscillator . Earnings last week slowed down considerably, with only Coterra Energy , Disney , and Texas Roadhouse reporting. Noise around some of Coterra’s drilling inventory on Monday evening knocked the stock lower, and it was the biggest Club loser on the week, down almost 9%. Disney shares surged Wednesday on quarterly beats and strong guidance . Disney, which also advanced in Thursday and Friday’s sessions, was our best-performing stock of the week, up 14.5%. Texas Roadhouse on Thursday evening showed momentum in April that blunted inflation risk nipping at its heels. The stock was our second-best performer last week, up 5.5%. There are no Club earnings this week, but the economic data calendar is fully loaded. 1. Inflation A pair of inflation reports for the month of April are the most important releases. The consumer price index (CPI) is due out Tuesday morning, followed by the produce price index (PPI) before Thursday’s opening bell. For both reports, the topic de jour will be whether there is any indication that Trump’s tariffs on imports into the U.S. are adding to inflationary pressures. While Trump largely paused his steeper “reciprocal” on April 9, a baseline import duty of 10% remained in effect on most U.S. trading partners and, of course, the tariff rate on Chinese goods ballooned to 145% during the month. As of Friday, economists expect the April CPI to increase 2.3% year over year, compared with 2.4% in March, according to Dow Jones. Excluding volatile food and energy prices, so-called core CPI in April is expected up 0.3% month over month, per Dow Jones, compared with 0.1% in March. Meanwhile, on a core basis, PPI is seen rising 0.3% month over month after a negative 0.1% reading in March, according to Dow Jones. On an annual basis, PPI was up 2.7% in March. CPI measures the prices paid by consumers on a range of goods and services. PPI, meanwhile, tracks wholesale inflation by measuring what producers are paid for their output — and that’s why PPI is usually considered a leading indicator of consumer inflation. If businesses are paying more for inputs such as steel, it could eventually prompt them to raise prices on the product bought by consumers. One thing keep in mind with these data and the potential for tariffs to show up: Prices used to calculate the CPI are collected throughout the entire month. For most items in the PPI, though, the prices that get inputted into the index are for the Tuesday of the week that contains the 13th day of each month, according to the Bureau of Labor Statistics . 2. Other economic data A few non-inflation reports are on our radar, most notably the April retail sales report on Thursday morning and the University of Michigan’s consumer sentiment index Friday. The March retail sales data were much stronger than expected , with shoppers trying to beat tariffs on items such as cars driving some of that increase. Now we’ll get a chance to see how buying behaviors changed, if at all, in April as certain tariffs took effect. The Dow Jones consensus is for a 0.1% month over month rise after a 1.4% jump in March. The Michigan sentiment reading has been quite dour for the past few months, causing some investors to worry about the implications for the U.S. economy. But for the most part, the pessimism has not shown up in government economic reports covering that same timeframe. This disconnect between the “soft” data such as surveys and the official “hard” data been the subject of much debate — and Fed chief Powell received a question about it during last Wednesday’s press conference. The consensus for Friday’s May sentiment reading is 53, compared with 52.2 previously, according to Dow Jones. 3. Non-Club earnings Despite the lack of Club names reporting, there are notable companies outside the portfolio doing so this week and what they say could have implications for some of our names. On Wednesday night, networking provider Cisco Systems and AI cloud computing firm CoreWeave will offer some insights into the state of AI spending and adoption. Both companies have relationships with Nvidia. Then on Thursday, Walmart , Alibaba and Deere are set to report. Walmart, the American retail giant, and Alibaba, the Chinese e-commerce heavyweight, will in their own ways demonstrate how the U.S.-China trade war is impacting consumer behavior in both countries (Alibaba also has a cloud service and plays heavily in AI). And finally, Deere, considered an economic bellwether stock, was hurt by Trump’s trade war with China during his first term, and executives expressed concerns about tariffs when they reported in February. Deere’s fresh numbers and commentary will be illustrative of the effects so far. Week ahead Monday, May 12 Before the bell: Plug Power (PLUG), monday.com (MNDY), NRG Energy (NRG), 21st Century Fox (FOX), Fox Corporation (FOXA), Dole (DOLE), Sally Beauty Holdings (SBH) After the bell: Rigetti Computing (RGTI), Hertz Global (HTZ), DaVita (DVA), Simon Property Group (SPG), Brink’s Company (BCO), Bally’s Corporation (BALY), Topgolf Callaway Brands (MODG), ZoomInfo (ZI) Tuesday, May 13 Consumer Price Index report at 8:30 a.m. ET Before the bell: JD.com (JD), Sea Limited (SE), Landstar System (LSTR), Tencent Music Entertainment (TME), Honda Motor (HMC), Under Armour (UAA), Venture Global (VG) After the bell: Nu Holdings (NU), KinderCare Learning (KLC), Danaos Corp. (DAC), Everus Construction Group (ECG) Wednesday, May 14 Before the bell: Dynatrace (DT), Arcos Dorados (ARCO), Tower Semiconductor (TSEM) After the bell: Cisco Systems (CSCO), CoreWeave (CRWV), Nextracker (NXT), Boot Barn (BOOT), Jack in the Box (JACK), DXC Technology (DXC), Fidelis Insurance (FIHL) Thursday, May 15 Producer Price Index report at 8:30 a.m. ET Initial jobless claims at 8:30 a.m. ET Census Bureau’s Retail Sales report at 8:30 a.m. ET Federal Reserve’s Industrial Production and Capacity Utilization report at 9:15 a.m. ET Before the bell: Alibaba Group (BABA), Walmart (WMT), ZEEKR Intelligent Technology (ZK), Canadian Solar (CSIQ), Deere & Co. (DE), Ke Holdings (BEKE), Birkenstock (BIRK) After the bell: Applied Materials (AMAT), Cava Group (CAVA), Take-Two Interactive (TTWO), National Grid (NGG), Virgin Galactic (SPCE) Friday, May 16 Bureau of Labor Statistics’ Import and Export Price Indexes at 8:30 a.m. ET Census Bureau’s New Housing Starts at 8:30 a.m. ET University of Michigan’s Consumer Sentiment Index at 10 a.m. ET Before the bell: Flowers Foods (FLO) (Jim Cramer’s Charitable Trust is long . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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Containers are pictured at the Yantian port in Shenzhen, Guangdong province, China May 9, 2025.
Tingshu Wang | Reuters
Trade deal progress dominated last week’s stock market and promises to be influential in the week ahead.