TL;DR

S&P 500 +2.9% on U.S.-China tariff deal; Fed cut bets trimmed; oil, crypto, Tesla, Uber surge.

Highlights

• S&P 500 jumps 2.9% to 5,822 as Trump announces China will "fully open" markets and both sides slash tariffs (U.S. from 145% to 30%, China from 125% to 10%) 1.
• Fed rate cut expectations trimmed: 56 bps priced in by December, first cut now seen in September; 2-year Treasury yield rises 12 bps 2.
• Brent crude up 3.65% ($66.24), WTI up 4.1% ($63.54) on U.S.-China tariff reduction and improved demand outlook 3.
• Trump signs executive order to align U.S. drug prices with lowest global rates, threatens tariffs on non-compliant countries; legal and industry pushback expected 4.
• SEC Chair Atkins signals shift to clear crypto regulation, moving away from enforcement-first approach 5.
• BlackRock's IBIT Bitcoin ETF hits 625,000 BTC after $1.03B inflow; Goldman Sachs increases IBIT stake by 28% to $1.4B 620.
• MicroStrategy adds 13,390 BTC ($1.34B), now holding 568,840 BTC (2.7% of supply) 7.
• Tether USDT supply surpasses $150B, with Tron now the leading chain for USDT 8.
• Tesla regains $1T market cap; robotaxi launch in Austin set for June, but faces NHTSA scrutiny on FSD safety 1011.
• Uber reaches all-time high ($86.80, +45% YTD) on strong growth and autonomous vehicle partnerships; $100 price target set by analysts 14.
• NRG Energy acquires 18 power plants for $12B, boosting capacity by 13 GW; stock up nearly 10% on deal and Q1 beat 13.
• Shopify to join Nasdaq-100 on May 19, replacing MongoDB; shares rise over 9% 12.
• S&P 500 Q1 earnings up 13.4% YoY, with 78% beating estimates; top 10 stocks now 36% of index market cap 15.
• Chegg to cut 22% of workforce amid revenue decline and AI competition; cost cuts underway 9.
• U.S. April budget surplus at $258B (+23% YoY) on record tariffs and strong tax receipts; FY deficit at $1.05T 19.
• Europe and U.S. demand Ukraine ceasefire, threaten sanctions; Russia rejects proposal, raising risk of escalation 1617.
• Trump announces Yemen ceasefire with Houthis, reducing Red Sea shipping risk but straining U.S.-Israel ties 18.

Commentary

U.S. equities rallied sharply after the announcement of a broad U.S.-China trade reset, with the S&P 500 closing up nearly 3% 1. The agreement to slash tariffs and open Chinese markets to U.S. businesses is driving optimism for global growth and improved corporate earnings, as reflected in strong Q1 results (S&P 500 earnings +13.4% YoY, 78% beat rate) 115. The move also triggered a surge in oil prices, with Brent and WTI both up over 3%, as traders anticipate increased demand from the world's two largest economies 3. However, the 90-day pause on tariffs means the situation remains fluid, and any reversal could quickly impact risk assets and commodities 3.

Fixed income markets responded by paring back expectations for Fed rate cuts, with traders now seeing 56 bps of easing by year-end (down from 75 bps), and the first cut pushed to September. The 2-year Treasury yield rose 12 bps, reflecting less urgency for monetary stimulus as trade headwinds recede 2. The April budget surplus, boosted by record customs duties, is a temporary positive, but the fiscal year deficit remains elevated at $1.05T 19.

Crypto markets continue to see strong institutional flows, highlighted by record inflows into BlackRock's IBIT ETF and MicroStrategy's continued accumulation 67. The SEC's pivot to clearer crypto regulation could further support U.S. digital asset adoption 5. Tether's USDT supply topping $150B and Tron surpassing Ethereum as the leading USDT chain signal robust stablecoin activity and liquidity 8.

In corporate news, Tesla and Uber are both benefiting from investor enthusiasm for autonomous vehicles, with Tesla regaining a $1T market cap ahead of its robotaxi launch (though facing NHTSA scrutiny) 1011 and Uber hitting new highs on AV partnerships 14. NRG Energy 's $12B acquisition expands its power generation footprint, tapping into rising demand from AI and data centers 13. Conversely, Chegg's layoffs and restructuring underscore the disruptive impact of AI on legacy business models 9.

Geopolitical risk remains in focus. Russia's rejection of a Western-backed Ukraine ceasefire raises the risk of additional sanctions, particularly on energy and banking, which could affect European and global markets 1617. The Yemen ceasefire reduces immediate Red Sea shipping risks but introduces new diplomatic friction with Israel 18. Traders should monitor late-session flows for profit-taking and remain alert to further developments from Washington, Beijing, and Moscow as the tariff truce and geopolitical negotiations evolve.