The stock market slipped on Friday as investors awaited much-anticipated trade talks between U.S. and Chinese officials this weekend. The Dow Jones Industrial Average lost 119.07 points, or 0.29%, closing at 41,249.38. The S&P 500 inched down 0.07%, closing at 5,659.91, while the Nasdaq ended the session little changed at 17,928.92.
The talks with Chinese officials come after the U.S. and United Kingdom recently reached a preliminary trade deal. Investors are hopeful that this momentum will lead to more agreements being reached quickly. However, a 10% tariff rate on the U.K. appears to be the baseline for global trade going forward.
President Trump commented on Truth Social, suggesting that an “80% Tariff on China seems right” ahead of negotiations led by Treasury Secretary Scott Bessent in Switzerland this weekend. This is a de-escalation from the current 145% tariff on China but is still higher than many economists expected. The rate could be lowered below 60%.
“Progress this week was encouraging, but we remain in the ebbs and flows of the news cycle, which is causing market reactions. We are likely in a sideways period of volatility until we begin to get tangible outcomes,” said Mark Hackett, chief market strategist at Nationwide. For the week, the S&P 500 slid about 0.5%, while the Nasdaq dropped roughly 0.3%.
The Dow fell almost 0.2%. Susquehanna International Group upgraded “buy now, pay later” stock Affirm to a positive rating from neutral. Analyst James Friedman left his price target of $65 unchanged, representing approximately 20% upside from Affirm’s Thursday close.
Investors await trade talk outcomes
The stock has shed 24% this year. Affirm reported earnings of 1 cent per share in its last quarter, beating expectations of a 3-cent loss, with revenue of $783 million, in line with consensus estimates.
Wells Fargo found that only 13 companies in the S&P 500 have withdrawn their earnings outlooks so far in the current earnings season, which could be beneficial for investor sentiment. “This relatively short list of firms/industries has been a positive earnings season surprise,” equity analyst Christopher Harvey wrote. Morgan Stanley upgraded shares of Tapestry, which owns fashion brands Coach, Kate Spade, and Stuart Weitzman, to an overweight rating from equal-weight.
Analyst Alex Straton raised the price target to $90 from $75, representing a 16% upside from the stock’s Thursday closing price. Tapestry recently reported third-quarter adjusted earnings of $1.03 per share on revenue of $1.58 billion, beating estimates. Monster Beverage stock rose 2% on Friday, marking a new all-time high.
The energy drink company continues to be the top-performing stock among current S&P 500 constituents, with shares soaring 392,000% since 1995. Total household credit and debit card spending rose only 1% year-over-year in April, according to Bank of America. Spending was “soft in a few categories in April, including airlines, clothing, and home improvement,” said economist Aditya Bhave.
Energy stocks were a bright spot on Friday, emerging as the top-performing sector in midday trading. Futures for oil were up 1.5%, retaking the $60 per barrel level. One notable stock movement was Insulet, which surged more than 19% after first-quarter results exceeded estimates on both the top and bottom lines.
The company reported adjusted earnings of $1.02 per share on $569 million in revenue, beating expectations and prompting a hike in its full-year guidance for revenue growth.
Image Credits: Photo by Joshua Mayo on Unsplash
