On the eve of US-China trade talks, market volatility: the Dow fell more than 100 points, Affirm's strong earnings report receives a stock upgrade.

Taiwan • Business • 05/09 23:01
On the eve of US-China trade talks, market volatility: the Dow fell more than 100 points, Affirm's strong earnings report receives a stock upgrade.

The U.S. stock market's major indices ended the day with mixed results on Friday, with the Dow Jones Industrial Average falling 119 points due to market unease over the upcoming U.S.-China trade talks in Switzerland. The U.S. and U.K. have reached a preliminary trade agreement and may potentially lower tariffs on Chinese goods. Affirm stood out as a stock after being upgraded by investment firms due to its better-than-expected earnings.

Key Updates

05/12 02:59

On May 12, 2025, U.S. stock index futures rose, with the Dow Jones Industrial Average at 41,770, the S&P 500 climbing to 5,759.75, and the Nasdaq 100 reaching 20,542.

On May 12, 2025, at 9:30 AM local time, the three major U.S. stock futures rose. The Dow Jones Industrial Average futures increased by 447 points to 41,770, the S&P 500 futures rose by 81.75 points to 5,759.75, and the Nasdaq 100 futures climbed by 405.25 points to 20,542. Progress in U.S.-China trade negotiations boosted the upward trend, reflecting investor confidence in the market, especially in the strong performance of technology stocks.

05/12 02:59

Former President Trump is optimistic about the future of the U.S. economy and urges investors to buy stocks, taking advantage of trade agreement opportunities.

On May 9, 2025, former U.S. President Trump announced a trade agreement with the United Kingdom, stating that the U.S. economy would "soar like a rocket," urging investors to buy stocks. His promoted "Magnificent and Lavish Act" includes tax cuts, energy deregulation measures, and debt ceiling adjustments. Despite the market's impact from tariff policies, Trump's optimistic attitude and policy initiatives offer investors a fresh perspective.

05/12 01:54

In April 2025, the US stock market experienced a technical rebound: Retail investors drove the S&P 500 up by 14%, and corporate buyback plans attracted market attention.

Since April 2025, the U.S. stock market has rebounded, with the S&P 500 index rising 14% in April alone and the Nasdaq index rebounding 15%. This surge was led by retail investors collectively buying technology stocks and options, leading to a short squeeze. U.S. companies announced buyback plans totaling $233.8 billion, the second highest level since 1984, bringing the total buybacks for the year to $665.1 billion. Structural changes in the market and Federal Reserve policies have become key focal points, with growth stocks and defensive stocks showing divergent performances, reflecting the contradictions and uncertainties in investor sentiment.

05/11 10:57

The easing of the U.S. labor market and the shift in AI chip policy are boosting tech stocks, with the technology and healthcare sectors of the S&P 500 leading the gains.

In May 2025, the U.S. labor market showed signs of easing, inflationary pressures persisted, and service sector activities rebounded. The Trump administration plans to lift AI chip export restrictions imposed during the Biden era, boosting tech stocks like Nvidia and AMD. Earnings reports from S&P 500 companies were impressive, with technology and healthcare sectors leading the gains. Nvidia plans to release a scaled-down version of the H20 chip in July to address export restrictions. The utilities sector showed steady performance due to AI-driven electricity demand, and small and mid-cap stocks gained market attention due to the "Made in America" reshoring policy.

05/10 05:59

Bank of America Chief Strategist Warns: U.S. Stock Market Rebound May Be Nearing Its End, with $24.8 Billion Withdrawn Over the Past Four Weeks, Recommends Shifting to Bonds and International Stocks as a Hedge

Michael Hartnett, Chief Investment Strategist at Bank of America, warns that the rebound in U.S. stocks might be coming to an end, as there has been a net outflow of $24.8 billion from the U.S. stock market over the past four weeks, marking the largest outflow in two years. Hartnett suggests that investors consider moving to bonds and international stocks by 2025 to address the risks of slowing U.S. economic growth, uncertainty in trade policies, and potential asset price adjustments.

05/09 23:01

On the eve of US-China trade talks, market volatility: the Dow fell more than 100 points, Affirm's strong earnings report receives a stock upgrade.

The U.S. stock market's major indices ended the day with mixed results on Friday, with the Dow Jones Industrial Average falling 119 points due to market unease over the upcoming U.S.-China trade talks in Switzerland. The U.S. and U.K. have reached a preliminary trade agreement and may potentially lower tariffs on Chinese goods. Affirm stood out as a stock after being upgraded by investment firms due to its better-than-expected earnings.

05/09 15:03

On the eve of the US-China trade talks, US stocks opened up on May 9, 2025, with all three major indexes rising.

On May 9, 2025, high-level trade talks between the US and China are set to begin in Geneva, Switzerland, causing US stock markets to rise at the opening. The Dow Jones Industrial Average rose 37.0 points to 41,405.48, the S&P 500 increased 15.7 points to 5,679.65, and the Nasdaq Composite went up 94.4 points to 18,022.549. Anticipation of eased trade tensions drove the stock market upward.

05/09 13:30

Five Key Things to Know Before the U.S. Stock Market Opens on May 9, 2025: U.S.-U.K. Trade Agreement, Corporate Earnings Reports, and Other Key Factors

On May 9, 2025, U.S. stock market investors are focused on the U.S.-UK trade agreement, U.S.-China trade negotiations, corporate earnings, and economic data. U.S. stock futures rose following the U.S.-UK trade agreement; U.S.-China trade negotiations will be held in Geneva, with tariff policies being the focal point; Pinterest's earnings report was strong, while Expedia's stock price dropped due to weak travel demand; U.S. retail sales rose by 1.5% in April, and the Producer Price Index (PPI) fell by 0.4%; Bitcoin broke through the $100,000 mark, and the escalating military conflict between India and Pakistan has heightened concerns over geopolitical risks.

05/09 11:04

President Donald Trump pushes for a new tax reform bill: expects economic growth and criticizes the Federal Reserve for its slow policy

On May 9, 2025, U.S. President Trump promoted a new tax reform bill, with plans to increase taxes on high-income earners to finance tax cuts for the middle and working classes, continuing the policies of his first term. Trump referred to this bill as a "big and beautiful bill," anticipating it will stimulate economic growth and urged investors to invest in U.S. stocks. He criticized Federal Reserve Chairman Powell for failing to lower interest rates promptly, calling his actions sluggish and detrimental to the coordination of economic policies.

05/09 03:09

Palantir rises to the top ten US tech companies: Market value reaches $2,810 billion, driven by government contracts and the US-UK trade agreement.

On May 8, 2025, Palantir Technologies (NASDAQ: PLTR) experienced a 7.85% increase in its stock price, closing at $119.15 per share, with its market capitalization reaching $281 billion, making it the tenth-largest tech company in the United States, surpassing Salesforce. The stock price increase was driven by strong financial results, an upward revision of the annual forecast, the US-UK trade agreement, and support from government contracts. The market expressed concerns about its price-to-earnings ratio of 520, reflecting both high expectations and potential risks associated with its valuation.

Market Focuses on US-China Talks, Dow Drops 119 Points

On Friday (May 9), the three major US stock indices had mixed results. The Dow Jones Industrial Average fell 119.07 points, or 0.29%, closing at 41,249.38 points; the S&P 500 index slightly dropped 4.03 points, closing at 5,659.91 points; while the Nasdaq index slightly rose by 0.78 points, closing at 17,928.92 points. Overall, the three major indices recorded slight declines this week, with the Dow down nearly 0.2%, the S&P 500 down about 0.5%, and the Nasdaq down about 0.3%.

Market sentiment was influenced by the upcoming US-China trade talks to be held in Switzerland over the weekend. U.S. Treasury Secretary Scott Bessent will meet with Chinese Vice Premier He Lifeng for what is seen as a "crucial" meeting. Investors are closely watching whether the two sides can make breakthroughs on high tariff policies.

US-UK Preliminary Agreement Sends Positive Signals, 10% Tariff Becomes Global Benchmark

On the eve of the US-China talks, President Trump announced a preliminary trade agreement with the UK, marking the first international agreement since the "reciprocal tariff" policy was proposed in early April. The agreement sets a 10% benchmark tariff, which the market views as a potential reference standard for future global trade agreements.

Trump stated on the social platform Truth Social: "Many trade agreements are about to be reached, and they are very good (fantastic!)!" This statement further fueled market expectations for easing trade tensions. However, Trump also signaled pressure on China, saying that "an 80% tariff on China seems reasonable," sparking speculation about negotiation strategies.

Currently, US tariffs on Chinese goods are as high as 145%. If reduced to 80%, it would still be above the market's expected below 60%, but it indicates potential room for policy adjustments. Analysts point out that this could be a strategic signal from the US side before negotiations, aiming to test China's bottom line.

Investors Remain Cautious, Futures Market Experiences Volatility

After Trump released the possibility of tariff adjustments, U.S. stock futures briefly dipped before stabilizing slightly. Dow futures rose 0.1%, while S&P 500 and Nasdaq 100 futures each rose 0.3%. European stock market gains narrowed, and the Mexican peso turned from rising to falling, indicating that global markets remain highly sensitive to trade policy directions.

Mark Hackett, Chief Market Strategist at Nationwide, noted: "We are still in a news cycle-induced volatility, triggering market reactions. Before we start getting tangible, calculable results, we are likely in a period of sideways volatility."

Affirm's Earnings Beat Expectations, Receives Upgrades and Target Price Increase

In individual stocks, Affirm Holdings (NASDAQ: AFRM) drew market attention. The company reported its third-quarter fiscal 2025 earnings, with earnings per share of 1 cent, exceeding the market's expectation of a 3-cent loss, and revenue reaching $783 million, a 36% year-over-year increase, in line with market expectations.

Susquehanna International Group analyst James Friedman upgraded Affirm's rating from "neutral" to "positive" and maintained a target price of $65, about 20% higher than the closing price on May 8. The stock has fallen 24% this year, and this upgrade injects new market confidence.

Friedman pointed out that the main catalysts for the upgrade include a 115% year-over-year increase in Affirm Card transaction volume, indicating increased penetration in in-store shopping scenarios. Additionally, the usage of 0% annual interest rate products grew by 44%, showing increased consumer acceptance of its products.

The company's management also shared stress test results under an economic recession scenario, indicating that even with a 50% increase in credit pressure, GMV (Gross Merchandise Volume) growth rate can still be maintained at around 25%, demonstrating a certain resilience in its business model.

Financial Stability, Market Optimistic About Medium to Long-Term Potential

As of March 31, 2025, Affirm held $1.4 billion in cash and cash equivalents, a 33.4% increase from the end of fiscal 2024. Total assets reached $10.4 billion, a 9.6% year-over-year increase; shareholders' equity was $2.9 billion, a 5.2% year-over-year increase. Additionally, adjusted operating income reached $173.7 million, with an operating profit margin of 22.2%, higher than the management's estimated range of 20-22%.

Despite ongoing trade policy and macroeconomic uncertainties affecting the overall market, Affirm, with its strong financial performance and stable financial structure, has received positive evaluations from investment institutions, becoming one of the few tech stocks to rise against the trend recently.

References

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