Welcome Investors!

Hello and welcome to this week’s edition of Capital Management Weekly! Whether you’re just starting your financial journey or just looking for a way to improve what you have started, we’re here to provide tips, news, and advice to help you take control of your financial future.

In This Issue

• The Market Watch: Looking at the three big index fund movers

• The Chinese Concessions: the three concessions China Gave up to get to the table.

• An Unexpected Outcome: A new benefit to the American Consumer

• Final Thoughts

The Market Watch

With the weight of major tariffs gone many investors had renewed faith in the market and took advantage pumping many stocks and indexes very high in just a day, here are some I wanted to highlight:

S&P 500

The S&P 500 surged 3.3%, closing at 5,844.19, as investors welcomed the 90-day pause in the trade war between the U.S. and China. The index’s broad-based rally reflected renewed confidence in global economic stability, with tech and retail sectors leading gains. This jump helped the S&P 500 erase its year-to-date losses, signaling that market sentiment had shifted decisively in favor of risk assets following the easing of tariff threats. This might signal a major shift in investor sentiment.

Dow Jones Industrial Average

The Dow Jones Industrial Average climbed more than 1,100 points, or 2.8%, to close at 42,410.10. Blue-chip stocks rallied as the de-escalation in trade tensions reduced fears of a global slowdown. Major industrial and consumer companies, which had been under pressure from tariffs, rebounded sharply. The Dow’s outsized move showed how sensitive the index is to developments in international trade policy.

Nasdaq

The Nasdaq posted the largest percentage gain among the three, jumping 4.3% to finish at 18,708.34. Technology giants such as Apple, Nvidia, and Meta Platforms saw their shares rise between 5% and 6%, as the risk of retaliatory Chinese tariffs diminished. The Nasdaq’s strong performance highlighted the tech sector’s outsized influence on the market.

The Beginning of Negotiation: The Three Major Concessions The Chinese Government Made

Well it looks like the trade war is finally over and the US has come out on top, with both countries facing hardship from the decoupling, there waas one country that had it wya worse.

That was China. With its significant increase in factories having to shut down and layoff workers there was growing dissent fro the population forcing it to go to the negotiating table first to make a deal. Here is three major concessions that China had to give up to get there:

#1 China Agreed to Reduce Tariffs

China agreed to reduce its tariffs by 115%, bringing the rate down from 125% to 10% on American goods for a 90-day period. This move allowed the United States to slash its own tariffs on Chinese imports from 145% to 30%. The reduction was announced after high-level talks in Geneva, marking a significant de-escalation in the ongoing trade war between the two countries.

The primary reason for this dramatic tariff cut was to ease economic pressures caused by the trade dispute, which had led to falling exports, declining factory activity in China, and volatility in global markets58. By lowering tariffs, China aims to stabilize its manufacturing sector and encourage renewed trade flows, while also signaling its willingness to resolve disputes through dialogue. Both sides hope this 90-day reprieve will create space for further negotiations and potentially lead to a more durable trade agreement.

#2 China Agreed to Take Down Its Non-Tariff Barriers

China agreed to dismantle many of its non-trade barriers as part of the recent trade agreement, a move that highlights the effectiveness of American negotiation. The United States pushed for the removal of these barriers to ensure fairer access for American products and services, addressing long-standing concerns about market restrictions and regulatory hurdles faced by U.S. businesses in China.

By agreeing to suspend and eliminate non-monetary barriers, such as export controls and restrictions on American companies, China demonstrated a willingness to open its economy further.

The U.S. secured a more level playing field for its businesses, reinforcing its reputation as a strong advocate for its economic interests on the world stage. One sector that will benefit from the significant lowering of restrictions is our agriculture center which will now be able to ship out tons of product to Chinese consumers.

#3 China is Going to Address the Fentanyl Crisis

China has recently taken steps to address the fentanyl crisis, signaling a more serious commitment during high-level trade talks in Geneva. As part of these discussions, China sent its deputy minister of public safety, described as their "fentanyl expert," to engage directly with U.S. officials to curb the flow of fentanyl and its precursors to the United States.

Despite progress in other trade areas, President Trump maintained a 20% tariff on Chinese products linked to fentanyl, refusing to lower this duty even as other tariffs were reduced or suspended. This firm stance reflects the administration’s priority on combating the opioid epidemic and holding China accountable for its role in the supply chain.

U.S. officials have accused Chinese companies of facilitating the export of fentanyl and related chemicals, contributing to tens of thousands of American overdose deaths annually. The ongoing dialogue aims to produce concrete actions from China, with the hope that enhanced cooperation will help stem the crisis and save American lives.

Another Unexpected Outcome

In the White House press briefing where we first learned about the concessions China made to facilitate these trade talks we heard the Treasury Secretary Scott Bessent speak about how countries have now come to the US once again with better deals than before eager to sign and restart trade with the largest consumer market in the world.

With over 75+ countries waiting to make a deal we will see how these new deals can benefit all Americans and keep us on top as the economic superpower. THe best deals are yet to come with only one down and many more to go we wil see how the US continues its negotiations.

Thank you for reading!

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