Let’s take a step back. Monday, May 12, wasn’t just any trading day – it was the kind of day that sends ripple effects across the market. Between a major U.S.–China tariff truce, shaky but recovering healthcare stocks, and political shifts shaking up clean energy, the landscape for U.S. equities changed dramatically.
Now, as we roll into Tuesday, May 13, traders are digesting the impact. The question is: How much of the good news is already priced in – and what should we expect next?
Let’s break it down.
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The Big One: U.S.–China Call a Truce (For 90 Days)
Yep, you read that right. After years of tit-for-tat tariffs and policy tension, Washington and Beijing agreed to a 90-day trade truce. The U.S. will cut tariffs on Chinese goods from 145% to 30%, while China will reduce its tariffs on U.S. goods from 125% to 10%.
This wasn’t a vague promise – it was a deal with real numbers and a real timeline. Negotiated in Geneva, the agreement puts a freeze on further escalation while both sides work toward a more lasting trade framework.
What happened in the markets? Investors hit the “buy” button.
- S&P 500, Nasdaq, and Dow all closed up more than 3% SPY–0.04% DIA+0.54%
- Amazon popped nearly 8%
- Semis, industrials, and consumer goods soared
It was, as some analysts put it, a “reset” for market sentiment. Even Goldman Sachs took note, cutting U.S. recession odds from 45% to 35% and nudging up GDP expectations.
But – yes, there’s a but – futures were down slightly on Tuesday morning, with the S&P 500 and Nasdaq slipping about 0.4%. Why? The easy answer: much of the upside was priced in on Monday. And traders know how these stories go – hope today, reality tomorrow.
Pharma: Scare, Selloff, Rebound
In the healthcare world, Monday morning started with a jolt: President Trump signed an executive order urging U.S. drugmakers to voluntarily match their prices to the lowest rates seen in peer countries – a “most-favored-nation” pricing concept.
The language was bold. But the execution? Not so much.
There was no immediate enforcement, just a 30-day window for voluntary compliance. And that calmed nerves fast.
Here’s how it played out:
- Morning: Pharma and biotech stocks sold off on regulatory fears
- Afternoon: Clarity emerged, the market relaxed
- Close: Some names were even green
It was textbook volatility. And heading into Tuesday, healthcare remains on the radar – not because this order changed the game, but because headline risk is back on the table.
If more concrete action follows, that’s a different story. But for now? Pharma dodged a bullet.
Clean Energy Feels the Chill
If there was one corner of the market that didn’t enjoy Monday’s rally, it was clean energy.
On the same day markets were celebrating the tariff truce, House Republicans unveiled budget proposals that would roll back much of the 2022 Inflation Reduction Act’s green policies.
Here’s what’s on the chopping block:
- EV and home energy tax credits
- Renewable energy production incentives
- Emissions standards for future vehicle models
The plan also included easier LNG export approvals and funding to refill the Strategic Petroleum Reserve, clearly signaling a pivot back toward fossil fuels.
The market’s response?
- Solar, wind, and EV names dropped
- Oil and gas names – especially pipeline operators – rose modestly
The political math isn’t clear just yet. The Senate is still divided, so the rollback may not sail through. But for now, investors are reassessing growth assumptions for clean tech, and pricing in a more oil-friendly Washington.
Earnings Anchored the Day
Earnings weren’t the spotlight on May 12, but they still added to the market mood.
Let’s look at two key movers:
- Enbridge Inc. smashed expectations with CA$18.5 billion in Q1 revenue, up 68% year-over-year (Simply Wall St)
- Gogo Inc. jumped more than 40% after a strong report showed $0.18 EPS and 121% revenue growth, driven by demand for in-flight Wi-Fi (TipRanks)
No surprises from financials or major laggards helped markets stay focused on macro themes.
What’s the Vibe Heading Into May 13?
Tuesday is shaping up to be a digestion day. Monday brought the headlines. Now traders want to see if they stick.
Key things to watch:
- CPI Data Drop: The April inflation report is due – and it’s huge. If CPI trends lower, it could extend gains in tech and consumer sectors. If not, the pullback could deepen.
- China-Linked Stocks: Expect follow-through – or fade – in trade-exposed names
- Healthcare: Will anyone in D.C. follow up on the executive order?
- Energy Split: Does fossil fuel strength continue? Or do clean-tech investors see a buying opportunity?
Final Word
May 12 gave the market a confidence boost. But it also reminded investors that politics, policy, and headlines matter just as much as earnings or economic data.
As May 13 begins, optimism is balanced by realism. The market has momentum – but it’s not on autopilot. The next move? It depends on inflation data, follow-through on policy, and whether Monday’s enthusiasm can evolve into something sustainable.
Either way, the next 48 hours could shape how May ends – and how summer trading begins. Stay sharp.
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