Tariff selloff, we hardly knew you! Stocks surged yesterday, pushing the S&P 500 Index (SPX) back to where it traded at the beginning of March. So far today, equities are digesting that move – with a modest give-back of some gains underway. Gold and silver are bouncing along with crude oil, while the dollar is dipping.
After weeks of “Sell America” trading, Wall Street flipped to “Buy America” mode yesterday. US stocks and the US dollar surged after the US-China trade talks resulted in a major rollback of President Trump’s tariffs – and the countermeasures China implemented. The US is now charging 30% tariffs on Chinese goods, down from 145%, for the next 90 days. China’s tariff rate on US imports was cut to 10%.
US and Chinese representatives will now need to hammer out a longer-lasting deal during the three-month tariff pause. Meanwhile, negotiations with other countries are ongoing. Trump is in the midst of a four-day trip through the Middle East. It will include stops in Saudi Arabia, the United Arab Emirates, and Qatar.
SPX, UNH, COIN (YTD % Change)
Data by YCharts
UnitedHealth Group Inc. (UNH) has fallen from grace in spectacular fashion. Now, its former CEO and current Chairman Stephen Hemsley is stepping back in – and current CEO Andrew Witty is stepping down. The health insurance giant slashed its earnings guidance already, then just suspended its updated forecast, amid higher medical costs and rising care usage by covered individuals. The stock was already down more than 25% so far this year, and it lost even more ground in early trading.
Finally, Coinbase Global Inc. (COIN) shares are surging because the cryptocurrency exchange earned a spot in the S&P 500 Index. Since so many funds track the S&P, getting added to its membership roster usually boosts a company’s shares.
COIN is taking the spot formerly held by Discover Financial Services (DFS), which Capital One Financial Corp. (COF) is acquiring. The addition also comes amid a crypto resurgence, with Bitcoin recently trading around $104,000 – close to an all-time high.
