US Financial Markets: This Week's Rundown

📈US Market Performance

A great week for US markets as the Trump Administration secures trillions of dollars in investments from Middle East partners like Saudi Arabia, the UAE, and Qatar. This said to be a demonstration of commitment and good faith for favorable negotiations towards peace and collaboration regarding major issues in the region. Inflation coming in lower than expected also helped as well, I guess.

🪙US Treasury Market

3-Month	4.34%
1-Year	4.01%
2-Year	4.48%
10-Year	4.48%
30-Year	4.97%

The US Treasury market has been pushed around ever since "Liberation Day." Although yields came down below 4% initially for the 2-year yield, it (and the rest of the yields) shot up, and, in the case of the 30-year, came close to 5%. With the temporary agreement with China, the Trump administration eased bond investors' worries. But, Japan recently threatened to begin selling its if tariffs on autos and a more favorable trade agreement does not come soon. With the US having its AAA wings clipped for the last time as of the Friday close, expect more volatility in the coming week.

🤔Primary Drivers

• The US-China preliminary agreement to lower tariffs to 30% on China and 10% on the US will provide relief to all US businesses that deal with Chinese goods or businesses - aka all of them. (Sources: US-China Geneva Agreement - The White House)

• Saudi Arabia’s initial approximate investment was $600 billion in US tech and energy, with more announced from the UAE and Qatar, adding up to over $2 trillion. (Source: Saudi Arabia $600 billion Investment - The White House).

• Inflation came in lower at a rise of 0.2% in the past month, dropping to 2.3% in the trailing 12 months. This excited investors with the thought of interest rate cuts as soon as next month. (Sources: US BLS; April CPI "lowest since 2021" - CNBC)

  
  

😬Nervous Nellies

• The US lost the last of its golden AAA rating from Moody’s after the Friday close. Who would have thunk you have to pay back what you borrow eventually?😲 (Source: Reuters)
  

• Consumer sentiment has fallen to a new low in recent years. Consumers are still fearful of the uncertainty, but we all know actions speak louder than words. Until we see where the money flows (or the lack thereof), take it with a grain of salt. (Source: CNBC)
  

• The right flank of the House Republicans shot down the initial tax proposal in the Ways and Means Committee. Per the leader of this group, Chip Roy (R-TX), claims that there is simply not enough cuts to spending to justify the tax cuts. Republicans need to move quickly if they want to reach their May 26 deadline. However, they are already planning on July 4 as their new realistic deadline. (Source: Reuters)
  

👀Notable Mentions

• NVIDIA's CEO is set to speak on Sunday, 11:00 P.M. Eastern at the annual Computex event. A beneficiary of the current US-China deal, NVIDIA is said to be announcing new products at the event. Huang will be discussing the “emerging technology” that has and will continue to grow the business. (Source: Investopedia)

• “There’s a limit to what we can bear,” Walmart CFO John Rainey warned. Walmart announced its Q1 earnings, which came in line with analyst expectations. Although the company performed well, it gave a “rare warning” that prices will be going up. The slim profit margin Walmart takes in would be disrupted otherwise due to the tariff impact. Price hikes began in late April and will continue for the time being. (Source: The AP News)

• Average 30-year Mortgage Rate: 6.81%. Down from the 6.91% at the beginning of the year, but up from the 6.62% low of April. (Source: FRED - St Louis Fed)