OPENING CALL

Stock futures soared on Monday after a trade deal to substantially lower tariffs was reached with China over the weekend.

According to a joint statement, Trump's "reciprocal" tariffs on China will fall to 10% from 125% , and China will slash its tariff on goods to 10% from 125%, with reductions set to last for 90 days while talks continue.

"We're confident that the deal we struck with our Chinese partners will help us to work toward resolving that national emergency ," Trade Representative Jamieson Greer said, referencing President Trump's characterization of the U.S.'s trade deficit.

After the next 90 days expire, Treasury Secretary Scott Bessent said "as long as good faith efforts, engagement and constructive dialogue then we will keep moving forward. "

Stocks to Watch:

Amazon, Apple, Tesla all surged in premarket trade on news of the U.S.-China deal.

Pfizer bucked the bullish trend after Trump said he would sign an executive order aimed at reducing drug prices. Pfizer shares fell premarket.

Watch For:

World Agricultural Supply & Demand Estimates; Fed-speak from Adriana Kugler on the economic outlook; earnings from Fox, Hertz and Simon Property

Today's Headlines/Must Reads:

-Gold Futures Slump as U.S., China Agree to Substantial Tariff Cuts

-Why JPMorgan says the U.S. lag vs. European stocks is just beginning

-Stock-market bulls face inflation test this week, but trade talks may set the tone

MARKET WRAPS

Forex:

The dollar rose to a one-month high after Bessent said an agreement with China to substantially lower tariffs had been reached following talks at the weekend.

The euro was likely to remain under pressure on optimism over a de-escalation in the global trade war, Convera said.

"Recent market dynamics have positioned the euro as a hedge against U.S. policy uncertainty, benefiting from safe-haven flows when equities decline."

Any further trade progress could accelerate the euro's losses, it said.

Sterling rose to a five-week high against the euro as risk sentiment improved.

Sterling is also supported by an improved trade picture for the U.K. following deals with the U.S. and India along with upcoming negotiations with the EU, ING said.

The Bank of England's cautious stance on interest-rate cuts is another supportive factor, it said.

Bonds:

Goldman Sachs's baseline for the economy remained supportive of a central view of lower short-end yields and a steeper curve eventually.

However, without hard data that cleared the hurdle to justify interest-rate cuts, there is a near-term risk that rate-cut pricing continues to erode, it said.

Energy:

Oil prices rose on market optimism.

Oil has gained on a general risk-on sentiment in the market, as the lowering of the tariffs improves the outlook for the global economy.

That raises the prospect of a limit to weakness in oil demand, ANZ said.

Concerns over higher supply continue to hang over the market, it said.

Metals:

Gold futures slid as the tariff deal with China increased risk-on sentiment.

Elsewhere, safe-haven demand for gold had been further weakened on de-escalating geopolitical tensions.

Base metal prices rose.

Base metals have ridden the resultant wave of positive market sentiment, as the tariff reductions lifted the global economic outlook and raised demand expectations.

Previously, forecasters had lowered China's growth outlook, given the effects of punitively high tariffs on Chinese goods.

TODAY'S TOP HEADLINES

The 'most important consumer earnings report of the season' lands this week

In April, when President Donald Trump escalated his trade war, Costco Wholesale Corp. COST, at least, managed to put up a sales gain. Amazon.com Inc. AMZN said it hadn't yet seen any impact from tariffs, while Mattel Inc. MAT temporarily stopped trying to forecast their effects. Restaurants have said diners are more cautious, and imports are starting to fall.

But on Thursday, we'll get the most direct look yet at how shoppers are faring when big-box retail and e-commerce giant Walmart Inc. WMT reports first-quarter results.

Tariffs Are Crashing TV's Annual 'Upfront' Ad-Sales Party

Television's glitzy advertising-sales extravaganza is kicking into high gear this week, with media companies wooing brands to spend billions on their TV networks and streaming platforms.

But there is a plot twist. As the waitstaff prepare to serve signature cocktails and enough canapés to feed a small nation, tariffs have arrived as an unwelcome party crasher.

UniCredit Lifts Outlook After Earnings Beat Market Expectations

UniCredit lifted its guidance for the year after first-quarter earnings beat analysts' expectations, boosted by higher fee income.

The Italian lender said net profit increased to 2.77 billion euros ($3.12 billion) from 2.56 billion euros a year earlier on revenue that grew 2.8% to 6.55 billion euros.

Aramco's Earnings Narrowly Beat Expectations

Saudi Arabia's national oil company reported a marginal profit beat for the first quarter as weaker oil prices caused by global economic uncertainty dragged on earnings.

Saudi Arabian Oil Co., known as Aramco, said Sunday that net profit fell to $26.01 billion from $27.27 billion a year prior. That beat the $25.745 billion expected by analysts in a Visible Alpha poll.

How Trump's Middle East visit to push OPEC+ for more oil could end up hurting U.S. producers

Major global oil producers in the group known as OPEC+ did exactly what U.S. President Donald Trump has been asking for - and American oil producers may be the ones to soon pay the price.

The group, led by Saudi Arabia, announced on May 3 that it would accelerate its plans to boost output in June for a second month in a row, prompting a drop in oil prices to their lowest level in more than four years.

Trump's Family Is Rapidly Striking Business Deals in the Mideast

When President Trump tours the Middle East this week, he will be looking to secure investments in the U.S. from the world's richest petrostates. His family businesses and close associates already have been striking deals in the region at a rapid clip.

Saudi Arabia, the United Arab Emirates and Qatar, the three countries on the president's itinerary, stand out for their warm embrace of Trump Inc.

Proposal Cutting Medicaid Aims for GOP Middle Ground

WASHINGTON-House Republicans are releasing their plan to cut Medicaid spending, with the program's defenders in the GOP appearing to win the intraparty clash over how aggressively to change the system that provides health insurance to more than 70 million low-income and disabled people.

A section-by-section summary of the bill text, which was viewed by The Wall Street Journal, includes some of the changes Republicans have weighed for Medicaid, including work requirements and more frequent eligibility checks. But it doesn't lower the minimum share the federal government contributes to Medicaid in each state, cap per-person federal spending in the program or other steps some spending hawks sought.

Write to nina.kienle@wsj.com

TODAY IN CANADA

Earnings:

Chmtrade Logs 1Q

Constellatn Sftwr 1Q

DATA Commun 1Q

Denison Mines 1Q

dentalcorp Hldgs 1Q

DRI Hlthcre Trst 1Q

Ensign Energy 1Q

Exchange Income 1Q

Finning Intl Inc. 1Q

Hudbay Mnrls 1Q

K92 Mining Inc. 1Q

MAG Silver 2Q

Organigram Glbl 2Q

Quipt Hme Med 2Q

Titanium Trnsp 1Q

Trican Well Svc 1Q

Economic Indicators $(ET)$:

None.

Stocks to Watch:

Imperial Metals: Mount Polley Operations and Construction Activities Continue, B.C. Supreme Court Judge Heard Xatś ll First Nation Application for Interim Injunction on Thursday, Court Adjourned Application Until June 24

NGEx Minerals 1Q Loss/Shr C$0.17

Pan American Silver Announces Agreement To Acquire MAG Silver Corp., Agrees to Acquire MAG Silver, MAG Shareholders to Receive Total Consideration of About $2.1B Representing $20.54/Shr, Consideration to Comprise Cash Totaling $500M and 0.755 Pan American Share for Each MAG Share, Consideration Represents 21% Premium to MAG's Closing Price on NYSE American on May 9, MAG Shareholders to Own About 14% of Pan American Shares Following Transaction's Completion, Transaction Will Require Two-Thirds Approval by MAG Shareholders at Special Meeting Likely in July , Expects Transaction to Close in 2H, Deal Unanimously Approved by Boards of Both Companies, Recommended by MAG Special Committee, Advised by National Bank Financial; MAG Advised by BMO Capital Markets, GenCap Mining Advisory

Other News:

Delta, Korean Air to Buy Stakes in WestJet For $550M

Expected Major Events for Monday

04:30/JPN: Apr Corporate Insolvencies

05:00/JPN: Apr Economy Watchers Survey

16:00/US: World Agricultural Supply & Demand Estimates (WASDE)

18:00/US: Apr Monthly Treasury Statement of Receipts and Outlays of the U.S. Government

23:01/UK: Apr BRC-KPMG Retail Sales Monitor

23:01/UK: Apr UK Nations and Regions Growth Tracker

23:50/JPN: Apr Money Stock, Broadly-defined Liquidity

All times in GMT. Powered by Kantar Media and Dow Jones.

Expected Earnings for Monday

Advantage Solutions Inc $(ADV)$ is expected to report $-0.09 for 1Q.

Agenus Inc $(AGEN)$ is expected to report for 1Q.

Atlanta Braves Holdings Inc $(BATRA)$ is expected to report for 1Q.

Aurinia Pharmaceuticals Inc (AUP-T,AUPH) is expected to report $0.14 for 1Q.

Blade Air Mobility Inc $(BLDE)$ is expected to report $-0.11 for 1Q.

Century Casinos Inc $(CNTY)$ is expected to report $0.00 for 1Q.

Chegg Inc (CHGG) is expected to report $-0.23 for 1Q.

CytomX Therapeutics Inc (CTMX) is expected to report $0.12 for 1Q.

Editas Medicine Inc $(EDIT)$ is expected to report $-0.51 for 1Q.

Ensign Energy Services Inc (ESI.T,ESVIF) is expected to report $-0.04 for 1Q.

Essential Utilities Inc $(WTRG)$ is expected to report $0.80 for 1Q.

Foghorn Therapeutics Inc $(FHTX)$ is expected to report $-0.32 for 1Q.

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May 12, 2025 06:01 ET (10:01 GMT)

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