CoinDesk Bitcoin Price Index Gained 1.89% to $103228.75 — Data Talk

By Jack Hough

I was raised Baptist, not Catholic, so there was no pope. The ecclesiastical structure of our church seemed less top-down than casserole-based, going by the number of potlucks. Doctrinally, we were dunkers at baptisms, not sprinklers. More to the point, there was no mention of purgatory, either at Sunday school or the grown-up service.

So when I describe the current investing period as tariff purgatory, please don't hold me to theological precision. I mean only that we're in an intermediate stage between Liberation Day and whatever comes next. So far, it's going great, which feels comforting, which seems complacent, which sounds scary, so maybe it's going pre-horribly, when you think about it.

I mean, shouldn't there be more punishment? Early last month, President Donald Trump announced crushing global tariffs, and markets panicked. Then he instituted a tariff teaser rate of 10% for 90 days everywhere except China, which gets 145% for now. Markets felt better about that.

Then the president posted online about how the Federal Reserve chair's "termination" can't come soon enough. Markets wobbled, because it wasn't clear whether he was referring to May 2026, when Jerome Powell's time is up, or to more of a clear-out-your-desk-by-noon-because-you-didn't-cut-rates type of thing, which would be messy, because presidents aren't supposed to be able to fire Fed chairs willy-nilly, and, if we're stickling, rate cuts are decided by a 12-member committee. The president later said that he wasn't contemplating a firing, and markets liked that.

Now the U.S. and the United Kingdom have announced a trade deal, or at least the underpinnings of a framework of agreeable deal elements. The 10% tariff is mostly sticking. The U.S. will also talk in Switzerland this weekend with China, whose policymakers, the president says, "very much want to make a deal," which has Wall Street murmuring about those 145% tariffs coming down. But stocks haven't just trimmed their losses — they're about where they were before the tariffs were announced.

I can think of three explanations. First, the president is right, and the U.S. is "getting rich on tariffs." As an apolitical neo-401(k)ist, I'm rooting for this one. It could be doubly rewarding, because I plan to sue for at least a partial refund of the money I paid for that economics degree. Second, Corporate America has such gravitational pull that policy changes bend to its will like light around a black hole. Earnings march endlessly higher. Climate change? That's just the sun starting to revolve around Microsoft. Happiness is a cap-weighted index fund. I like this option a lot more than the next one.

Third, we've developed buythedipitis. It's a condition brought on by four decades of rising global trade, which boosted profits and held down U.S. prices, allowing interest rates to move much lower, which made stocks an even better deal, not to mention houses and cars. Symptoms of buythedipitis include excessive reliance on policymakers to act as a put, or something that pays off when stocks crash, by pulling various financial levers to get gains going again, or even just talking about pulling levers.

"Retail investors, quite different from institutional investors, remain invested in the market, and they have been buying the dip," says UBS Investment Bank Chief Strategist Bhanu Baweja. "The data in the U.S. really hasn't deteriorated." First-quarter growth was weak, but only because tariff front-running skewed the math. Earnings have been solid. "People are legitimately saying, 'Show me the whites of the eyes of the slowdown, and I might think about it,' " says Baweja.

The problem is that the bite from higher tariffs on consumer budgets could still be coming. Assume that the U.K. agreement is soon repeated everywhere, holding tariffs at 10%, except for China, where talks yield a cut to 60%. "Even then, the hit to particularly domestic demand, less so to GDP, is gonna be so large that the kind of earnings expectations folks have for the S&P 500 over the next 12 months, which is 11.2% [growth], valued at 20.7 times forward earnings, just seems much too optimistic," says Baweja.

He expects the S&P 500 to decline to 4800 by the third quarter, 15% below recent levels. After that, look for a rebound, but expect lower returns in coming years than investors are used to. Forget about policy puts, given burdensome government debt levels. And rate cuts might not bring longer bond yields down much, due to the supply of new Treasuries, he says.

If Baweja is right, plan on single-digit returns for a while, not double-digit ones, and only after we're well past tariff purgatory. "Quite bluntly and simply, I'd be a seller into these rallies in the equity market," says Baweja. "And by contrast, I'd be buying bonds on dips."

Changing topics, a quick public service announcement: Sunday is Mother's Day, and for dads of young children, Wife's Day by Proxy. Surely you have flowers ordered and restaurant reservations made. If you've forgotten, don't panic. I have an idea. Simply explain that while flowers remain the most popular Mother's Day purchase, cited by 74% of respondents in a survey from the National Retail Federation, and "special outings" are third, at 61%, these categories haven't shown much growth in polling data going back to 2007. Indeed, greeting cards, at 73%, have been in decline. More on-trend categories include electronics, which have shot from 11% to 22%, and gift cards, up from 39% to 54%.

Then explain that shoppers say they'll spend an average of $259.04 per person on Mother's Day this year, up exactly $5 from last year, but that mere averages just won't do for such an extraordinary mom. So you've decided to match the 2023 high point of $274.02, delivered in the increasingly popular form of an e-commerce gift card, which has already been emailed. Of course, you don't want to say all this empty-handed. Be sure to print out the NRF survey results for supporting documentation.

Or just hit Cracker Barrel. There are no reservations, and everyone loves southern fried chicken.

Write to Jack Hough at jack.hough@barrons.com. Follow him on X and subscribe to his Barron's Streetwise podcast.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

By Katy Barnato and Matt Wirz

U.S. stocks ended a quiet session mixed, following a rally Thursday after President Trump negotiated a trade agreement with the U.K. He also laid down a marker for coming talks with Beijing, floating the idea of 80% tariffs.

The Dow Jones Industrial Average slipped, reversing early gains, while the Nasdaq Composite and S&P 500 settled near the flatline. Some technology stocks surged, with Tesla gaining about 4%.

An 80% tax on Chinese imports would be a rollback from the maximum 145% levies introduced since Trump took office earlier this year-but would still pose serious hurdles to trade between the world's two largest economies.

Chinese and U.S. officials, including Treasury Secretary Scott Bessent, are set to meet this weekend, potentially paving the way for broader negotiations. Both sides have indicated the key objective for this meeting is to de-escalate tensions.

"80% Tariff on China seems right! Up to Scott B.," President Trump posted on social media early Friday.

"Many Trade Deals in the hopper, all good (GREAT!) ones!" the president later wrote. National Economic Council Director Kevin Hassett said about two dozen pacts "are this close to being resolved," which would "be very settling for markets."

In the meantime, new data from China showed an early tariff hit-goods shipments in April to the U.S. fell by more than a fifth from a year earlier, while exports to Southeast Asia jumped.

Investors will be on watch for comments from several Federal Reserve policymakers, after the Fed warned Wednesday that tariffs risked pushing up both unemployment and inflation, and kept interest rates on hold. Governor Adriana Kugler said Friday that the labor market was stable and close to maximum employment.

In recent trading:

Stock indexes were modestly lower for the week. Pinterest and Expedia were among notable movers on the day.

Treasury yields edged down, after sharp gains Thursday.

European stocks inched up, including the German DAX.

Bitcoin extended Thursday's rally, which took prices above $100,000 for the first time since February.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

The Ibovespa rose 0.2% to close at 136,512 on Friday, its highest level since August, securing a 1% weekly gain for the São Paulo exchange and marking its fifth consecutive week of gains.

The rally came as investors digested domestic inflation data and global optimism over trade negotiations fueled broader risk appetite.

Brazil’s annual inflation rate rose to 5.53% in April, the highest since February 2023, remaining above the Central Bank’s 4.5% upper target for the sixth straight month.

Meanwhile, global trade concerns eased as senior US and Chinese officials prepared for talks in Switzerland, while a US–UK trade agreement signed Thursday signaled a de-escalation in tariff tensions, improving sentiment toward Brazil’s export outlook.

In corporate news, Itaúsa jumped 4.5% after posting strong Q1 results, leading gains.

In contrast, Suzano (-2.7%), Banco Bradesco (-1.3%), and Localiza (-6.4%) fell following disappointing earnings.

The S&P 500 Index is down 26.76 points or 0.47% this week to 5659.91

• Largest one-week point and percentage decline since the week ending April 17, 2025
• Snaps a two-week winning streak
• Today it is down 4.03 points or 0.07%
• Snaps a two-trading-day winning streak
• Off 7.88% from its record close of 6144.15 hit Wednesday, Feb. 19, 2025
• Off 2.12% from the Election Day close of 5782.76 on Tuesday, Nov. 5, 2024
• Off 5.62% from the Inauguration Day close of 5996.66 on Monday, Jan 20, 2025
• Off 0.20% since tariffs were announced on Wednesday, April 2, 2025
• Off 7.88% from its 52-week high of 6144.15 hit Wednesday, Feb. 19, 2025
• Up 13.59% from its 52-week low of 4982.77 hit Tuesday, April 8, 2025
• Rose 8.37% from 52 weeks ago
• Off 7.88% from its 2025 closing high of 6144.15 hit Wednesday, Feb 19, 2025
• Up 13.59% from its 2025 closing low of 4982.77 hit Tuesday, April 8, 2025
• Month-to-date it is up 1.63%
• Year-to-date it is down 221.72 points or 3.77%

Data based on preliminary market closing values

Source: Dow Jones Market Data, FactSet

U.S. stocks end mostly lower for the day with major averages snapping a two-week winning streak as investors weigh developments in trade talks and the effect the uncertainty is having on corporate earnings as 1Q reporting season nears a close. Chinese and U.S. officials, including Treasury Secretary Scott Bessent, are set to meet this weekend, potentially paving the way for broader negotiations. Tesla share rise 4.7%, leading gains among the Magnificent 7. DJIA falls 119 points, or 0.3% to 41249, the S&P 500 slips 0.1% to 5659, while the Nasdaq is little changed at 17928. For the week the three indexes all end slightly lower. (patrick.sullivan@wsj.com)

US stocks closed little changed on Friday as investors looked ahead to high-stakes trade negotiations between the US and China in Geneva this weekend.

The S&P 500 edged lower by 0.1%, the Dow Jones fell 119 points, while the Nasdaq 100 finished mostly flat.

A brief boost in sentiment followed the announcement of a US-UK trade agreement, but uncertainty lingered over whether talks with China would yield meaningful progress.

Adding to the cautious mood, President Trump floated the idea of reducing tariffs on Chinese imports to 80% from the current 145%, while claiming that “many trade deals” are underway.

On the earnings front, Pinterest jumped 4.8% on strong ad revenue forecasts, while Expedia slid 7.3% after missing revenue expectations, and Affirm sank 14.5% on weak fourth-quarter guidance.

The mixed corporate results underscored broader investor wariness amid trade headwinds.

The S&P 500 ended the week down 0.7%, while the Nasdaq lost around 0.6%.

The Dow slipped roughly 0.2%.