Wall St edges lower as trade truce rally ebbs, UnitedHealth falls

Economic

China–U.S. Trade War

Summary:

Wall Street dipped as optimism from the U.S.-China tariff truce faded. UnitedHealth plunged 16% on DOJ fraud probe news, while retail and energy stocks fell amid weak economic data and sliding oil prices.

Wall Street dipped on Thursday as elation from the U.S.-China tariff truce faded for major indexes, while UnitedHealth's stock took a pummeling after a report of a DOJ fraud inquiry into the insurer.

UnitedHealth Group plunged 16% to its lowest level since April 2020.

The Wall Street Journal reported that the U.S. Department of Justice was conducting a criminal investigation into the company for possible Medicare fraud. However, the health insurer said it had not been informed of a criminal probe by federal prosecutors.

Walmart will have to start raising prices later this month due to the high cost of tariffs, executives said, even as the retail giant's U.S. comparable sales surpassed expectations in the first quarter. Its shares were down 4.8%

At 09:42 a.m., the Dow Jones Industrial Average fell 128.62 points, or 0.31%, to 41,922.44, the S&P 500 lost 19.46 points, or 0.33%, to 5,873.03, and the Nasdaq Composite lost 123.27 points, or 0.64%, to 19,023.53.

Speaking on the day, U.S. Federal Reserve chair Jerome Powell said central bank officials felt they needed to reconsider the key elements around jobs as well as inflation in their current monetary policy approach.

U.S.

retail sales

growth slowed in April, while a Labor Department report showed the producer price index for final demand fell 0.5% for the same month, compared to an expectation of a 0.2% rise.

On an annual basis, producer prices came in at 2.4% versus an estimate of 2.5%.

"There will be a hump and pick up in prices, but until we see how big that is and how lasting that is, the Fed should be able to remain patient," said Jan Nevruzi, U.S. rates strategist at TD Securities.

The data dump follows a relatively tame consumer price reading earlier this week, indicating that consumer prices rebounded moderately last month.

In results-driven moves, Cisco Systems gained 2.9% after the networking-equipment maker raised its annual forecasts and named Mark Patterson its new CFO.

Only four out of the 11 S&P 500 sectors were trading in the green.

The energy sector fell the most, as oil prices slid around 3% on expectations of a U.S.-Iran nuclear deal that could result in sanctions easing.

Stocks have been see-sawing this week as equities jumped on Monday and Tuesday following a temporary ceasefire in the U.S.-China tariff war. The gains were enough to drag the S&P out of the red for the year - its first positive showing since late February - although it is still about 4% shy of its record highs.

Many megacap and growth stocks pulled back, with Nvidia slipping 1.2%, while Tesla shed 2.8%.

Foot Locker, soared 83.6% after rival Dick's Sporting Goods agreed to buy the footwear retailer for $2.4 billion.

Advancing issues outnumbered decliners by a 1.01-to-1 ratio on the NYSE, while declining issues outnumbered advancers by a 1.28-to-1 ratio on the Nasdaq.

The S&P 500 posted four new 52-week highs and three new lows, while the Nasdaq Composite recorded 17 new highs and 51 new lows.

Source: marketscreener

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Warren Takunda

Cryptocurrency

Key takeaways:

Bitcoin’s price is retracing, but strong ETF inflows, high network activity and whale accumulation suggest BTC is on track to $140,000.

Spot Bitcoin ETFs saw $2.9 billion in net inflows in two weeks, mirroring past rallies.

Declining exchange balances and a rising transaction volume Z-score suggest increasing overall demand.

Bitcoin price was down 1.4% over the last 24 hours. It traded 6% below its all-time high of $109,000, reached on Jan. 20. Nevertheless, several fundamental, onchain and technical metrics suggest that Bitcoin’s upside is not over.

Spot Bitcoin ETF inflows mirror past BTC rallies

Bitcoin’s latest recovery was accompanied by strong investor appetite for spot Bitcoin exchange-traded funds (ETFs), which recorded $2.9 billion in net inflows over the last two weeks.

The chart below shows that after the launch of the US-based spot Bitcoin ETFs in January 2024, these investment products saw net inflows of about $8.5 billion between Feb. 13, 2024, and March 13, 2024, peaking at a record single-day inflow of $1.045 billion on March 12, 2024. 6 Signs Predicting $140K as Bitcoin's Next Price Top_1

6 Signs Predicting $140K as Bitcoin's Next Price Top_1

Spot Bitcoin ETF flows. Source: Glassnode

Similarly, between Nov. 6, 2024, and Dec. 16, 2024, cumulative daily inflows hit $5.7 billion, aligning with Bitcoin’s 60% rally from $67,000 to $108,000 over the same period.

If ETF inflows continue, Bitcoin is likely to resume its uptrend toward new all-time highs.

Bitcoin market volatility index: risk-on

Increased inflows into spot Bitcoin ETFs signal high risk-on sentiment, as evidenced by a drop in the CBOE Volatility Index (VIX), which measures 30-day market volatility expectations.

Bitcoin network economist Timothy Peterson highlighted that the VIX index has dropped substantially to 18 from 55 over the past 25 trading days.

A VIX score below 18 implied a “risk-on” environment, favoring assets like Bitcoin.

The analyst said:“This will be a 'risk on' environment for the foreseeable future.”

CBOE Volatility Index. Source: Timothy Peterson

Peterson’s model, which has a 95% tracking accuracy, predicted a $135,000 target within the next 100 days if the VIX remains low.

Strong Bitcoin accumulation continues

Reinforcing the risk-on sentiment are Bitcoin whales, who have been increasing their holdings even as the price rallied. Glassnode data shows the Bitcoin Accumulation Trend Score (ATS) at 1 (see chart below), which signifies intense accumulation by large investors

According to Glassnode, the spike in trend score indicates a transition from distribution to accumulation across almost all cohorts. This shift mirrors a similar accumulation pattern observed in October 2024, which preceded Bitcoin’s rise from $67,000 to $108,000, spurred by US President Donald Trump’s election victory. 6 Signs Predicting $140K as Bitcoin's Next Price Top_3

6 Signs Predicting $140K as Bitcoin's Next Price Top_3

Bitcoin accumulation trend score. Source: Glassnode

Additional data from Santiment reveals that addresses holding between 10 BTC and 10,000 BTC have accumulated 83,105 more BTC in the past 30 days.

In a May 13 post on the X social platform, Santiment said,

“With the aggressive accumulation from these large wallets, it may be a matter of time until Bitcoin's coveted $110K all-time high level is breached, particularly after the U.S. and China tariff pause.”

Bitcoin 10-10,000 BTC chart holdings. Source: Santiment

Overall, this is a positive sign as continued accumulation signals bullish sentiment among this cohort of investors.

Declining Bitcoin balance on exchanges

BTC balance on exchanges reached a six-year low of 2.44 million BTC on May 15. According to the chart below, more than 110,000 BTC have been moved off exchanges over the last 30 days.

6 Signs Predicting $140K as Bitcoin's Next Price Top_5

BTC reserve on exchanges. Source: CryptoQuant

Decreasing BTC balances on exchanges means investors could be withdrawing their tokens into self-custody wallets, indicating a lack of intention to sell in anticipation of a future price increase.

Increasing network activity

Bitcoin’s potential to rise is supported by increased network activity, as highlighted by crypto investor Ted Boydston in a May 15 post on X.

The Bitcoin transaction volume Z-score measures the difference between the current transaction volume and the average. It is often used to gauge network activity and market interest.

The chart below shows the metric has risen sharply from the negative zone and is approaching 1. A rising transaction volume Z-score, especially when it approaches or exceeds 1, is historically associated with Bitcoin price rallies.

“This is a good sign for Bitcoin price acceleration,” remarked Boydston, adding:“Bitcoin should be full bull once the Z-score breaches 1.”

Source: Ted Boydston

BTC rounded bottom pattern targets $140K

From a technical perspective, Bitcoin’s price has formed a rounded bottom chart pattern on the daily chart (see below). Bulls are now focused on pushing the price above the neckline of the governing chart pattern at $106,660.

A daily candlestick close above this level would confirm a bullish breakout from the rounded bottom formation, ushering BTC into price discovery with the technical target set at $140,000, or a 37% increase from the current level.

6 Signs Predicting $140K as Bitcoin's Next Price Top_7

BTC/USD daily chart. Source: TradingView

The relative strength index, or RSI, is at 70, and a bullish cross from the SMAs suggests that the market conditions still favor the upside, which can top out at even higher than $140,000.

As Cointelegraph reported, BTC price had broken out of a bull flag in the weekly timeframe, projecting a rally to $150,000.

Source: Cointelegraph

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Adam

Commodity

Oil fell for a second day after President Donald Trump said the US and Iran are getting closer to a deal regarding Tehran’s nuclear program, a move that could unleash more supplies onto a market that is rapidly approaching a glut.

Brent was trading around $64 a barrel after losing as much as 4% in London. US crude futures also slid.

If all sanctions on Iran are lifted, about 300,000 to 400,000 barrels a day of additional crude could hit global markets, analysts estimated. The development adds further gloom to a market that is already swimming in additional supplies after OPEC+ revived output at a faster pace than anticipated and trade talks between the US and major consuming nations cloud the demand outlook.

“I think we’re getting close to maybe doing a deal,” Trump told reporters in Doha. But prices found some support because Trump’s latest rhetoric was more optimistic than that of Iran. Its lead negotiator, Foreign Minister Abbas Araghchi, on Wednesday urged the US to come to the next round of Oman-mediated talks with a “more realistic” approach. The date and location for those is yet to be decided.

“In less than 24 hours, the narrative has shifted from the US imposing new sanctions on Iran to growing speculation that a diplomatic breakthrough may be within reach,” said Arne Lohmann Rasmussen, chief analyst at A/S Global Risk Management.

“If a deal is concluded, it would increase the likelihood of a significant oversupply later this year, especially when combined with the planned production increases from OPEC+,” he said.

Brent has averaged about $63 a barrel so far this month, the lowest price since 2021. The pullback will help soothe inflationary pressures in consuming economies but hits the coffers of major producers.

US shale companies have already reined in capital spending plans, and Saudi Arabia has lifted borrowing levels as the low prices show signs of biting.

Adding to the negative sentiment, the International Energy Agency said it expects global consumption growth to slow for the rest of this year as trade uncertainty puts pressure on demand.

“We’re seeing clear signs that the global economy is slowing and oil demand growth is slowing,” Toril Bosoni, head of the IEA’s oil markets division, said in a Bloomberg Television interview with Francine Lacqua.

Oil touched a four-year low during the depths of the trade tumult before mounting its biggest four-day gain since October after a détente was announced this week.

Prices remain down by about 13% this year thanks to the twin hit of trade uncertainties and faster-than-expected output increases by the Organization of the Petroleum Exporting Countries and its allies.

Source: Bloomberg

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Adam

Economic

U.S. manufacturing production fell more than expected in April amid a sharp decline in motor vehicle output, and the sector could struggle to regain its footing in the second quarter because of tariffs.

Factory output dropped 0.4% last month after an upwardly revised 0.4% gain in March, the Federal Reserve said on Thursday. Economists polled by Reuters had forecast production would slip 0.2% after a previously reported 0.3% rise.

Production at factories increased 1.2% on a year-over-year basis in April. President Donald Trump's shifting tariffs policy poses a significant headwind to manufacturing, which accounts for 10.2% of the economy and relies heavily on imported raw materials.

While the Trump administration slashed duties on Chinese imports last weekend to 30% from 145%, a 10% tariff on nearly all imports remained in place as did a 25% tax on steel and aluminum as well as motor vehicles and parts.

Trump has defended the tariffs as necessary to revive a long-declining U.S. industrial base, but economists say it is impossible to bring factories that moved overseas back to the country, citing high production and labor costs as among the challenges.

Manufacturing grew at a 4.8% rate in the first quarter after a prolonged slump due to higher interest rates.

Motor vehicle and parts output plunged 1.9% last month after increasing in the prior two months likely as automakers tried to stay ahead of tariffs. Motor vehicle manufacturers have warned tariffs would significantly cut into profits this year.

Durable manufacturing production fell 0.2%. Nondurable manufacturing production decreased 0.6%, with most industries posting declines.

Mining output slipped 0.3% after posting strong gains in the previous two months. Utilities production rebounded 3.3%. That followed two straight monthly declines.

Overall industrial production was unchanged after easing 0.3% in March. It increased 1.5% on a year-over-year basis in April.

Capacity utilization for the industrial sector, a measure of how fully firms are using their resources, dipped to 77.7% from 77.8% in March. It is 1.9 percentage points below its 1972–2024 average. The operating rate for the manufacturing sector dropped four-tenths of a percentage point to 76.8%. It is 1.4 percentage points below its long-run average.

Source :finance.yahoo

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James Whitman

Forex

Technical Analysis

AUDUSD technicals

The AUDUSD continues to face strong resistance at the 200-day moving average, which capped rallies both on Monday and again today at the session high of 0.6457. Sellers leaned into that level, keeping upside momentum in check and maintaining the bearish pressure.

On the downside, a cluster of moving averages, all broken on the move lower, sits between 0.6419 and 0.6437 and now acts as a key resistance zone. This area includes:

● The 200-hour MA at 0.64376

● The 100-hour MA at 0.64254

● The 100-bar MA on the 4-hour chart at 0.6419

After the fall, the low price reached 0.6401, just above the psychological 0.6400 level, where support buyers emerged. However, the rebound stalled at 0.6422, unable to reclaim the broken MAs—giving sellers a short-term advantage below this cluster.

To shift the bias back to the upside, the pair needs to sustain a move above 0.6437, and then break through the 200-day MA at 0.6457. That would open the door toward 0.6513, the high for the year.

Conversely, a break below 0.6400 could see further downside toward the next support at 0.6388, followed by the broader swing area between 0.6321 and 0.63437. Beyond that, key support targets include:

● The 100-day MA at 0.62951

● The 38.2% retracement of the April rally at 0.62844

Source: ForexLive

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Damon

Economic

Stocks

U.S. stocks fell Thursday, handing back some of the week’s hefty gains, as investors digest corporate earnings as well as weak economic data, raising slowdown fears.

At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average fell 180 points, or 0.4%, the S&P 500 index dropped 15 points, or 0.3% and the NASDAQ Composite slipped 85 points, or 0.5%.

Despite today’s losses, the main averages are still on course for healthy gains this week as the trade deal between China and the U.S. eased fears of a prolonged tariffs war, potentially hitting economic growth.

PPI inflation, retail sales slump

With the trade turmoil seemingly settling down, investors are turning their attention to the economic data slate, looking for signs of damage being done to the world’s largest economy.

The latest producer price index showed that factory gate prices slumped on a monthly basis in April, in the latest sign of cooling inflationary pressures.

The producer price index for final demand fell 0.5% in April, the first monthly fall since 2023, after the previous month’s figure was revised to flat from a fall of 0.4%.

Taking out more volatile items like fuel and food, so-called “core” PPI also fell on a monthly basis, down 0.4%.

Data released earlier this week showed that the more widely-watched consumer price index grew by 2.3% in the 12 months to April, compared with expectations that it would match March’s pace of 2.4%.

It was the lowest annual rate of inflation since February 2021, shortly before pent-up pandemic-fueled demand and supply constraints led to soaring prices.

Additionally, retail sales fell 1.0% on the month in March, a more substantial loss than the 0.5% expected.

A surge of buying before the implementation of Trump’s punishing tariffs led to the largest increase in the metric in more than two years in March. Separate surveys have indicated that households have widely been anticipating that the levies will push up prices.

Elsewhere, Federal Reserve Chair Jerome Powell is set to deliver remarks at a conference in Washington, D.C. Last week, the Fed left interest rates unchanged, with Powell noting strength in the broader economy but rising risks from inflation and unemployment.

Walmart impresses in Q1

The main corporate release Thursday comes from retail giant Walmart (NYSE:WMT), with the retail giant posting better-than-anticipated first-quarter earnings, although its finance chief warned that tariff tensions could soon drive prices higher..

Known for its low prices and massive selections, Walmart has become something of a bellwether for shopper sentiment. In February, the company issued downbeat guidance for the year, although CFO John David Rainey said American consumers remain "resilient" and focused on value.

Elsewhere, Chinese e-commerce titan Alibaba (NYSE:BABA) missed earnings expectations for its fiscal fourth quarter on both the top and bottom line, while agricultural equipment manufacturer Deere & Company (NYSE:DE) reported better-than-expected second quarter results, but lowered the bottom end of its full-year net income forecast range amid challenging market conditions.

Cisco Systems (NASDAQ:CSCO) raised its annual results forecast, betting on steady demand from cloud customers for its networking equipment, driven by the artificial intelligence boom.

UnitedHealth (NYSE:UNH) stock slumped after the Wall Street Journal reported the company was being investigated by the Department of Justice over alleged criminal fraud involving Medicare.

The investigation marks a new headwind for UnitedHealth, which is already nursing a sharp selldown in its shares this year on concerns over government scrutiny, weakening financials, and signs of internal strife. The company abruptly replaced its CEO this week.

Foot Locker (NYSE:FL) stock soared after Dick’s Sporting Goods (F:DKS) confirmed it is exploring a deal to buy the company for roughly $2.3 billion.

Crude slumped on Iran nuclear deal talk

Oil prices fell sharply Thursday, extending recent losses, as the growing expectations for a potential U.S.-Iran nuclear deal added to demand concerns following a surprise build in U.S. inventories.

At 09:35 ET, Brent futures dropped 2.5% to $64.45 a barrel, and U.S. West Texas Intermediate crude futures fell 2.4% to $61.56 a barrel.

Both benchmarks lost just under 1% on Wednesday, ending a four-day rally and slipping from the two-week high reached earlier this week.

A U.S.-Iran nuclear deal could potentially allow Tehran to export more of its crude into the world market, loosening the global crude supply-demand balance.

Additionally, data from the Energy Information Administration showed crude stockpiles rose by 3.5 million barrels in the week ended May 9, suggesting that demand may be cooling in the world’s largest energy consumer.

Source: Investing

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Warren Takunda

Economic

The U.S. dollar fell against the majority of its peers on Thursday after a flurry of economic data, including a gauge of consumer health that showed retail spending slowed in April as an uncertain economic outlook weighed on sentiment.

The Commerce Department said retail sales edged up 0.1% last month after an upwardly revised 1.7% surge in March, compared with the expectation of economists polled by Reuters to remain unchanged after a previously reported 1.5% jump in March. US Dollar Dips as Retail Sales Growth Slows in April_1

Retail sales

The boost in March was due in part to purchases of items such as automobiles being pulled forward ahead of U.S. President Donald Trump's April 2 tariff announcement.

In a separate report, the Labor Department said the producer price index (PPI) for final demand dropped 0.5% last month after an upwardly revised unchanged reading in March.

It was pulled down by waning demand for air travel and hotel accommodation as Trump's protectionist trade policy, immigration crackdown as well as references to Canada as the 51st state and a desire to acquire Greenland have contributed to a sharp drop in tourist travel. US Dollar Dips as Retail Sales Growth Slows in April_2

US Dollar Dips as Retail Sales Growth Slows in April_2

Inflation gauges

However, other data from the Labor Department showed weekly initial jobless claims held steady at 229,000, in line with expectations of economists polled by Reuters, although job openings have become more limited. US Dollar Dips as Retail Sales Growth Slows in April_3

US Dollar Dips as Retail Sales Growth Slows in April_3

Initial and continuing jobless claims

"I have a suspicion that this is not just about tariffs, I have a suspicion that there's an underlying tone of weakness in the U.S. consumer," said Thierry Wizman, global FX and rates strategist at Macquarie in New York.

"It is the tariffs, but it's also the underlying weakness among U.S. consumers at this point and Q2 will be a weak quarter for growth, given that we came into it with poor sentiment and a lot of uncertainty around policy. And it has not been completely resolved yet, despite what we did with China last weekend."

The dollar index , which measures the greenback against a basket of currencies, fell 0.25% to 100.75, with the euro up 0.27% at $1.1204.

There (are) two steps. There's a very, very nice step and there's a violent step.

The greenback started the week with a surge of more than 1% Monday after the United States and China announced a 90-day pause on most of the tariffs imposed on each other's goods since early April, easing fears of a global recession.

In light of the easing trade tensions, markets have dialed back expectations for rate cuts from the U.S. Federal Reserve this year, pricing in a 75.4% chance for the first cut of at least 25 basis points (bps) at the central bank's September meeting, according to LSEG data. The prior view was for a likely cut in July.

Recent comments from Fed officials have indicated the central bank needs more data to determine the impact of the tariff announcements on prices and the economy before adjusting policy.

In comments on Thursday, Fed Chair Jerome Powell did not focus on monetary policy or the economic outlook, but said central bank officials feel they need to reconsider the key elements around jobs and inflation in their approach to monetary policy given the inflation experience of the last few years.

Against the Japanese yen , the dollar weakened 0.67% to 145.77 while sterling strengthened 0.28% to $1.3296 after Britain's economy grew more strongly than expected in early 2025.

As trade tensions seem to have been temporarily defused, several major brokerages, including Goldman Sachs, JPMorgan and Barclays, scaled back their U.S. recession forecasts and their view of Fed policy easing this week.