Futures muted, upcoming U.S.-China trade talks in focus - what’s moving markets

Economic

China–U.S. Trade War

Summary:

U.S. stock futures were flat as markets eyed upcoming U.S.-China trade talks. A new U.S.-U.K. deal lifted sentiment, while Nvidia plans chip downgrades amid export controls. Oil prices edged higher.

U.S. stock futures were subdued ahead of the final day of the trading week, with markets gauging the potential for a series of new U.S. trade deals. Sentiment was buoyed on Thursday by a new trade agreement between the U.S. and U.K., with the spotlight now shifting to upcoming talks between American and Chinese officials this weekend. Elsewhere, artificial intelligence-darling Nvidia (NASDAQ:NVDA) is reportedly planning to downgrade its China-focused chip in a bid to meet stringent U.S. export controls.

Futures muted

U.S. stock futures hovered around both sides of the flatline on Friday, as investors assessed the implications of a recently-announced trade agreement between the U.S. and Britain.

By 03:38 ET (07:38 GMT), the Dow futures contract had dipped by 41 points, or 0.1%, S&P 500 futures had inched up by 3 points, or 0.1%, and Nasdaq 100 futures had gained 38 points, or 0.2%.

The main averages on Wall Street gained on Thursday, fueled by optimism that the new U.S. deal with the UK could help thaw global trade tensions.

While a baseline 10% U.S. tariff on imported British items will remain in place, the UK has said it will lower its duties to 1.8% from 5.1% and grant greater access to U.S. goods.

Plane parts made by engine manufacturer Rolls-Royce (LON:RR) (OTC:RYCEY) were also exempted from U.S. levies, bolstering airline stocks like Delta Air Lines (NYSE:DAL), which spiked by 7.2%. The sector-wide S&P 500 passenger airlines index climbed by 5.4%.

Boeing (NYSE:BA) shares advanced as well after Commerce Secretary Howard Lutnick said the UK had agreed to purchase $10 billion of aircraft from the jetmaker.

The U.S. dollar strengthened following the announcement, with analysts at ING saying the greenback was benefiting from "Trump shifting to market-appeasing mode" after his punishing -- and now partially delayed -- tariffs rocked investor confidence last month.

U.S.-U.K. trade agreement

Although it came with heightened fanfare from Trump, analysts noted that Thursday’s announcement was relatively light on substance, providing more of an outline that a detailed trade deal.

Still, hopes remain that the accord may be the first of many to come during the ongoing 90-day pause to Trump’s elevated "reciprocal" tariffs.

Speaking in the Oval Office with U.K. Prime Minister Keir Starmer listening in on a speaker phone, Trump said Britain had notched a "good deal", adding that other trading partners may end up with higher tariffs because they have larger trade surpluses with the U.S.

"[T]his rush to demonstrate progress on ’deals’ reveals a rising desperation within the administration to rollback tariffs before they hit gross domestic product growth and inflation," said Paul Ashworth, Chief North America Economist at Capital Economics, in a note. "That is still good news, however."

Trump previously slapped sweeping tariffs of up to 50% on goods from dozens of countries at a White House event in early April, arguing that the moves were necessary to bolster government revenues, reshore lost manufacturing jobs, and correct perceived trade imbalances. Despite postponing them a few days later, several tariffs are still in place, including the universal 10% levies and duties on other products like steel, aluminum and auto parts.

Many economists have warned that the tariffs could cause a "demand shock" in the world economy that eats away at global activity. Gross domestic product in the U.S. contracted in the first quarter, but there have been signs of resilience in consumer spending and the labor market.

U.S.-China trade talks ahead

Markets are now turning their focus to crucial talks this weekend between U.S. Treasury Secretary Scott Bessent and top trade negotiator Jamieson Greer and their Chinese counterparts in Switzerland.

Crucially, China was omitted from Trump’s tariff pause and now faces U.S. duties of at least 145%. Beijing has responded with its own reciprocal levies of 125%, sparking concerns over an intensifying trade conflict between the world’s two largest economies.

Trump suggested on Thursday that the much-anticipated discussions in Geneva on Saturday and Sunday will be substantive, saying he expects the soaring tariffs would eventually be lowered.

China’s Vice Foreign Minister has said the country has full confidence that it can handle trade issues with the U.S., adding that the draconian nature of the Trump administration’s tariff agenda cannot be sustained. Beijing has previously accused the U.S. of using the tariffs as a "coercion" tactic.

Nvidia planning to modify China-focused AI chip - Reuters

Nvidia is planning to release a less-powerful version of its H20 artificial intelligence chip in China within the next two months, as it moves to meet stricter U.S. export restrictions, Reuters reported on Friday.

The semiconductor giant has informed several major Chinese customers, including cloud computing services providers, of the move, Reuters reported, citing three sources familiar with the matter.

The H20 is the most powerful chip that Nvidia is allowed to sell in China, at least under Biden-era export controls. But the Trump administration recently signaled that it will impose new regulations on technology shipped to China, including rules requiring Nvidia to obtain a license to export the chip to the country.

Downgrading the H20 -- largely by lowering its computing power and slashing its memory capacity -- is expected to help Nvidia bypass the updated controls. The chip is at the forefront of China’s AI development efforts, and is used by a slew of companies ranging from AI startup DeepSeek to internet giants such as Baidu (NASDAQ:BIDU) and Alibaba (NYSE:BABA).

Oil climbs

Oil prices edged higher Friday, adding to the previous session’s gains as trade tensions eased ahead of talks between top oil consumers U.S. and China and after the announcement of the trade deal with Britain.

At 03:39 ET, Brent futures climbed 1.2% to $63.60 a barrel, and U.S. West Texas Intermediate crude futures rose 1.3% to $60.69 a barrel.

Both contracts settled nearly 3% higher on Thursday. Despite these gains, oil prices still remained close to four-year lows, as worries heightened economic uncertainty and its impact on crude demand remained.

source : Investing

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Michelle

Economic

Forex

China–U.S. Trade War

President Donald Trump needs to declare victories in his global trade battles soon or risk triggering a recession that could cost Republicans their slim majorities in Congress, according to analysts at Yardeni Research.

“President Donald Trump will need to declare victories in his trade wars with multiple countries around the world sooner rather than later,” the firm wrote. “He and his fellow Republicans have to avoid a recession caused by his tariff wars.”

The firm added that legal pressure is also mounting. Yardeni said, “Court cases are piling up that challenge the President’s legal authority to declare a crisis to justify his tariff hikes.”

They believe a ruling against the tariffs could give Trump an off-ramp: “He still could declare that he won the trade wars and so doesn’t need tariffs anymore.”

Markets have responded positively to signs of progress. “On April 9, stock investors were overjoyed that Trump postponed his April 2 Liberation Day reciprocal tariffs,” Yardeni said, adding that the S&P 500 has “regained almost all its losses” from early April’s “Annihilation Days.”

Recent announcements — including a U.S.-U.K. trade deal and upcoming talks with Chinese officials — have helped sustain the market’s momentum.

However, Yardeni warned that “the stock market will soon have deals fatigue and tire of Trump’s declarations of victory.”

Yardeni expects trade tensions to recede by midsummer: “We think the trade issue will be behind us by July or August,” the firm wrote.

After that, they believe attention could shift to the economic damage already done. Still, the firm remains optimistic, citing resilient unemployment data and temporary hits to productivity.

“We’re still betting on a Roaring 2020s scenario,” Yardeni said, driven by “technological innovations boosting productivity and real economic growth while keeping a lid on inflation.”

Source: Investing

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Glendon

Cryptocurrency

Bitcoin Achieves Record $103,000 Price Milestone

Bitcoin surpassed the $103,000 mark on May 9, 2025, marking a record high for the cryptocurrency.

Surpassing $103,000 emphasizes Bitcoin's maturity and institutional adoption, driving both enthusiasm and market activity.

The main event marks Bitcoin breaking the historical $103,000 level, spotlighting record-breaking institutional derivatives activity and a surge in new wallet creations. This unprecedented price point reflects heightened investor confidence and increased global attention on the cryptocurrency market.

Bitcoin's rise to a new all-time high involved major players on options platforms like Deribit, where open interest surged by $2.2 billion in a single day, reflecting significant institutional interest. The event captured attention across financial markets globally.

“Bitcoin hits $103,000, is up over 5% today.” — The Spectator Index

The development impacts cryptocurrency markets, encouraging retail and institutional investments. The surge in wallet numbers, with over 344,000 new wallets, underscores broader adoption and retail enthusiasm, driving further market expansion.

Financial implications are significant, with institutions making bold moves in derivatives. Political reactions are subtle, linked more to macro factors like the recent U.S.-U.K. trade deal, which bolsters cross-border capital optimism and aids institutional inflows into cryptocurrencies.

The event features major institutional leads like Deribit, indicating strong bullish sentiment in cryptocurrency markets. Future regulatory discussions might focus on derivatives and institutional activity. Historical trends suggest increased interest in DeFi and cryptocurrencies as Bitcoin breaks record highs.

Source: CryptoSlate

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Blue River

Technical Analysis

USDCAD is on the move, climbing off a seven-month low after news broke that the White House struck a trade deal with the UK. Hopes are now rising that more international agreements could be on the horizon, but in the meantime all eyes will turn to the Canadian employment data as the jobless rate is expected to rise back to a three-year high of 6.8%.

From a technical perspective, the rebound kicked in around the October 2024 base of 1.3750. Since then, the bulls have managed to push the pair above the 20-day exponential moving average (EMA) for the first time in seven months, signaling renewed upside interest.

Momentum indicators are starting to catch up, reinforcing the ongoing bullish action. But for a meaningful rally, a clear break above the upper band of the broad sideways trajectory at 1.3950 is essential. Even more important would be a move past the long-term EMAs at 1.4030. If that happens, momentum could accelerate toward the 1.4150 region, where the 38.2% Fibonacci retracement level of the latest downtrend lies, and then potentially stretch towards the 50% Fibo mark at 1.4272.

On the flip side, failure to hold above 1.3950 and a dip below the 20-day EMA at 1.3890 could squeeze the price back to the 1.3750 support zone. Note that the RSI is still hovering below its neutral 50 level, suggesting buyers haven’t fully taken control. A deeper pullback could find firmer ground at the rising trendline from December 2023 around 1.3645. If the 1.3600 round level gives way too, a more aggressive sell-off toward the August–September double-bottom area of 1.3420 could be on the cards.

In a nutshell, USDCAD has found some bullish momentum – but unless it can decisively clear the 1.3950–1.4030 barrier, the rebound may prove short-lived.

Source: ACTIONFOREX

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Gerik

Economic

Stocks

Investor Sentiment Cautious Ahead of U.S.-China Dialogue

On Friday morning, Asia-Pacific markets moved in mixed directions as traders braced for crucial developments from the upcoming U.S.-China trade talks scheduled for Saturday in Switzerland. The mood was marked by anticipation and restraint, especially following U.S. President Donald Trump’s unveiling of a preliminary trade agreement with the U.K.—a deal viewed by many as symbolically significant but substantively limited.

While the U.S.-U.K. agreement eased access in specific sectors like agriculture and slightly reduced tariffs on British automobiles, it maintained the baseline 10% tariff on imports from the U.K. President Trump emphasized that the U.K. deal should not be seen as a template for other nations, hinting that partners with large trade surpluses—such as China—may face harsher terms.

Markets React to Uncertainty and Potential De-escalation

Stock indexes across Asia responded variably to the unfolding situation. Japan’s Nikkei 225 rose 1.39%, and the broader Topix index gained 1.46%, nearing its longest winning streak since 2017. Australia’s ASX 200 advanced 0.49%, and Taiwan’s stock market added 1%, reflecting cautious optimism. However, South Korea’s Kospi dipped 0.12%, and China’s CSI 300 opened 0.2% lower, indicating uncertainty among mainland investors. Hong Kong’s Hang Seng Index edged up 0.2%.

The MSCI Asia-Pacific ex-Japan index remained flat, reinforcing the wait-and-see attitude across regional markets. Investors appeared reluctant to commit to stronger positions ahead of the weekend summit, preferring to assess concrete outcomes rather than respond to tentative diplomatic overtures.

U.S. Market Rally Fueled by Hope, Not Substance

Overnight, U.S. markets ended higher on optimism that the recent U.K. agreement could signal further global trade openings. The Dow Jones rose 254.48 points (+0.62%) to 41,368.45, the S&P 500 gained 0.58% to close at 5,663.94, and the Nasdaq Composite advanced 1.07% to 17,928.14.

However, futures contracts for U.S. equities hovered near flat levels as investors awaited evidence that talks with China would follow a similarly constructive path. Despite the lack of tangible policy shifts, markets were buoyed by President Trump’s suggestion that the current 145% tariff on Chinese goods might be reduced—though no timeline or details were provided.

Analysts Caution Against Overinterpretation

Kyle Rodda, Senior Market Analyst at Capital.com, warned that the U.S.-U.K. deal was “more form than function.” Still, he noted that the agreement supported a broader narrative of the U.S. exploring rapid trade pacts and marginal tariff reductions. “Constructive language and statements of intent,” Rodda said, “may be enough to push equity prices higher following the U.S.-China talks—provided no new escalation occurs.”

This view encapsulates the delicate balance markets are trying to maintain: reacting positively to signs of diplomatic progress, while remaining wary of the volatile and often unpredictable nature of U.S. trade policy under Trump’s leadership.

While the U.S.-U.K. agreement stirred hopes of trade liberalization, it also exposed the selective and strategic approach Washington may apply to future deals. As investors await the outcome of U.S.-China talks in Switzerland, regional markets are expected to remain volatile but directionless until more definitive signals emerge. A positive outcome could trigger a short-term rally, but sustained investor confidence will likely depend on whether tariff reductions are backed by enforceable commitments.

Source: Nikkei Asia

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Fiona Harper

Cryptocurrency

Economic

Bitcoin has crossed the $100,000 price mark, propelling its market capitalisation to new heights and surpassing Amazon to become the fifth-largest asset globally. The digital gold achieved the new feat on Thursday, May 8, 2025, when it surged to over $10,400, with a market cap of about $2.01 trillion.

As it stands, the digital asset has edged past Amazon's valuation of $1.837 trillion and trailing only gold, Apple, Microsoft, and Nvidia. This achievement underscores its growing legitimacy as a global asset class and its increasing adoption by institutional and retail investors alike.

The rally, which saw the coin climb over 6% in the past 24 hours to break the $100,000 barrier, has been fuelled by a combination of macroeconomic factors, institutional interest, and renewed market optimism. Posts on X captured the excitement, with user noting:“Bitcoin just surpassed Amazon to become the 5th largest asset in the world. No CEO, no headquarters, no marketing team. Just code, conviction, and global demand.” Another user announced, “Bitcoin officially surpasses Amazon to become the 5th largest asset in the world by market cap.”

Bitcoin surpasses $100,000

This milestone follows Bitcoin's earlier ascent in April 2025, when it briefly overtook Amazon and Google with a market cap of $1.86 trillion, reaching $94,000 per coin. At that time, CoinDesk reported that its rise was driven by easing U.S.–China trade tensions and a broader tech rally, with the crypto outperforming the Nasdaq. However, the recent surge past $100,000 marks a more sustained breakthrough, with its market cap now exceeding $2 trillion, a level it briefly touched in January 2025 when prices hit an all-time high of $109,000 during President Donald Trump's re-inauguration.

Main reasons for the Bitcoin rally

Analysts attribute its latest rally to several key factors. First, institutional adoption has surged, with U.S. Bitcoin exchange-traded funds (ETFs) recording significant inflows.

On April 22, 2025, CryptoNinjas reported that Bitcoin ETFs saw $936 million in net inflows, the highest daily figure since January, with no ETFs recording outflows. Major players like ARKB (Ark Invest and 21Shares) and FBTC (Fidelity) led the charge, signalling robust institutional confidence. Additionally, corporate accumulation has played a role, with Strategy₿, led by Michael Saylor, announcing a $555 million Bitcoin acquisition on April 21, bringing its holdings to over 538,200 BTC, valued at more than $50 billion.

Macroeconomic shifts have also bolstered its appeal. CoinTelegraph highlighted a “decoupling” from U.S. tech stocks in April, with Bitcoin rallying 15% while the Nasdaq 100 gained only 4.5%. Macro analyst Fejau noted that Bitcoin's immunity to tariffs, unlike U.S. assets, positions it as a high-beta asset without the tail risks associated with tech stocks. “This market regime is what Bitcoin was built for,” Fejau wrote, emphasising its role as a hedge against economic uncertainty. The Economic Times further noted that sustained ETF inflows, institutional buying, and improving global macroeconomic sentiment have supported Bitcoin's climb, with technical support at $88,000 paving the way for a test of $100,000.

Bitcoin's rise has not been without challenges. After peaking at $109,000 in January, its price fell to a low of $76,000 in early 2025 amid geopolitical tensions and economic uncertainties. However, the crypto's resilience has been evident, with a year-to-date gain of over 100% and a 40% increase over the past 12 months, significantly outperforming Amazon's negative 3.5% return over the same period. Amazon's stock, closing at $173.18 on April 23, has declined more than 21% year-to-date, highlighting Bitcoin's superior performance.

The broader crypto market has also benefitted from Bitcoin's rally, with the total crypto market cap reaching $3.27 trillion, a 37.51% increase from a year ago, according to CoinGecko. Ethereum (ETH), Dogecoin (DOGE), XRP, and Solana (SOL) recorded gains of 7–11% in April, reflecting a rising tide across digital assets. Its dominance, at 61.63% of the crypto market, underscores its leadership in the space.

As Bitcoin cements its place among the world's top assets, its journey from a niche experiment to a financial powerhouse continues to captivate markets. With no central authority or traditional corporate structure, Its rise challenges conventional financial paradigms, signalling a new era for digital assets.

Source: CryptoSlate

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Gerik

Economic

Commodity

Pipeline Diplomacy in Focus During Xi’s Moscow Visit

In a symbolic and strategically charged moment, Chinese President Xi Jinping’s state visit to Moscow has coincided with intensified talks between Russia and China over the ambitious Power of Siberia 2 gas pipeline. The project, designed to transport Russian natural gas from Siberia’s vast western fields to northern China via Mongolia, has been a long-standing Russian priority—especially since the rupture of its energy ties with Europe following the Ukraine conflict.

Russian Energy Minister Sergei Tsivilev confirmed that while negotiations are progressing actively, a formal contract is unlikely to be finalized before May 9. His comments, reported by state-run TASS, underscore the complexity and urgency of the deal as Moscow looks to re-anchor its energy exports toward the East.

China Holds the Advantage in Energy Talks

Beijing's leverage in the talks is clear. Now Russia’s largest gas customer and a key trade partner across multiple sectors, China is in no rush to close the deal. The collapse of Russia’s gas exports to Europe—once its primary energy customer—has put Moscow in a position of relative dependency. While eager to redirect supply, Russia faces mounting challenges convincing China to commit to pricing and volume terms that justify the scale of the Power of Siberia 2 investment.

Despite Russian reassurances, Beijing has not yet committed to specific purchase volumes or pricing, maintaining a cautious stance amid broader concerns over demand fluctuation, energy diversification, and market competition from LNG sources.

Technical and Strategic Hurdles Remain

The proposed 2,600 km pipeline would run from Russia’s Yamal gas fields through Mongolia into China’s industrial heartland. It is envisioned as a complementary project to the existing Power of Siberia 1 line, which became operational in 2019 but sources gas from eastern Russia. The second pipeline would open new export routes from western deposits, reshaping Russia’s export geography.

However, the ambitious scale of the project comes with technical, financial, and geopolitical complexities. Tsivilev noted that companies on both sides are working to draft contract frameworks, particularly around the Mongolian transit route, but these efforts require time and negotiation finesse, particularly as both sides weigh long-term strategic implications.

Geopolitical Backdrop: A Calculated Partnership

Xi’s visit to Moscow—during which he will meet President Vladimir Putin and attend Russia’s 80th anniversary Victory Day parade—marks a continuation of the deepening Sino-Russian political alignment. Xi is accompanied by leaders from nations maintaining ties with Russia post-Ukraine, signaling diplomatic solidarity.

Nevertheless, while the optics are strong, energy agreements remain transactional. China’s careful maneuvering reflects a broader pattern: strategic alignment without unconditional commitment. The gas pipeline talks exemplify this—China remains open to cooperation but insists on favorable terms.

The Power of Siberia 2 pipeline stands at the crossroads of geopolitical realignment and economic pragmatism. For Russia, it represents both an escape from European dependence and a lifeline for its gas sector. For China, it offers energy diversification and leverage. But the path to agreement remains obstructed by unresolved pricing issues and cautious diplomacy. As May 9 approaches, both sides may reaffirm strategic intent, but a binding deal appears still out of reach—pending further concessions or a shift in negotiation dynamics.