The stock market exhibited a mixed performance on May 9, 2025, as investors braced for significant trade talks between the U.S. and China scheduled for the weekend. The Dow Jones Industrial Average fell by 75 points, or 0.2%, while the S&P 500 and Nasdaq Composite showed slight gains, trading sideways throughout the day.
As the market limps into the weekend, the upcoming negotiations are poised to be a focal point for traders and analysts alike. Just about half of the stocks in the S&P 500 were on the rise, with the Invesco S&P 500 Equal Weight ETF, a measure of market breadth, up by a mere 0.1%. Four of the eleven sectors within the S&P 500—consumer discretionary, energy, real estate, and materials—managed to gain ground, while consumer staples, communication services, health care, and technology lagged behind.
In a related development, U.S. President Donald Trump made headlines with a provocative suggestion on his Truth Social platform, proposing an 80% tariff on Chinese goods ahead of the high-level trade negotiations in Switzerland. He wrote, "80% Tariff on China seems right! Up to Scott B," referring to Treasury Secretary Scott Bessent, who is leading the U.S. delegation at the talks. This proposed tariff rate would mark a significant reduction from the current 145% tariffs imposed on many Chinese imports, yet it remains sharply higher than the 10% baseline agreed upon in the recent U.S.-U.K. trade deal, according to reports from NBC.
During an event unveiling the U.K. trade deal on May 8, Trump hinted at the possibility of rolling back tariffs on Chinese goods, stating, "You can’t get any higher. It’s at 145, so we know it’s coming down," as reported by the BBC. He characterized the upcoming meeting with Chinese officials as "very friendly," emphasizing that both sides were aiming to proceed "in an elegant way." This optimistic tone contrasts with the backdrop of ongoing tensions and criticisms surrounding U.S. trade policies.
China's Vice Foreign Minister Hua Chunying expressed confidence ahead of the negotiations, stating that Beijing has "full confidence" in managing trade ties with Washington. However, the road to re-engagement has been complicated by internal concerns in Beijing regarding the economic toll of tariffs and the potential for diplomatic isolation. Reports indicate that these factors contributed to China's decision to send Vice Premier He Lifeng to the talks.
Despite the willingness to engage in dialogue, Chinese officials have not shied away from voicing their criticisms of Washington's tariff strategy. The Chinese foreign ministry stated that the U.S. has ignored China's goodwill and unreasonably imposed tariffs under the pretext of fentanyl, describing it as a typical act of bullying that undermines dialogue and cooperation between the two nations in the field of drug control.
Trump further escalated the rhetoric on May 9, declaring in a separate Truth Social post, "CHINA SHOULD OPEN UP ITS MARKET TO USA — WOULD BE SO GOOD FOR THEM!!! CLOSED MARKETS DON’T WORK ANYMORE!!!" This statement reflects a broader sentiment that has characterized Trump's approach to trade negotiations, emphasizing the need for reciprocity in market access.
As the market reflects a cautious optimism ahead of the trade talks, analysts are keenly observing how these negotiations will unfold and what implications they may have for both domestic and global markets. The outcome could significantly impact investor sentiment and trading patterns in the weeks to come.
In summary, the stock market's mixed performance on May 9, 2025, serves as a reflection of the uncertainty surrounding the upcoming U.S.-China trade negotiations. With President Trump's bold tariff proposal and China's assertive stance on trade relations, the discussions could lead to pivotal changes in the economic landscape. Investors and policymakers alike are left to ponder the potential outcomes and their ramifications as the weekend approaches.
