The China tariff pause has Wall Street scaling back recession calls

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Trump's latest tariff pause has Wall Street reeling back its recession calls. Discussion of an economic downturn later in 2025 had surged as economists argued Trump's widespread tariffs would boost inflation and slow economic growth.

🖥️ Nvidia supplier Foxconn cuts outlook due to tariff uncertainty: Taiwan's Foxconn, the world's largest contract electronics maker, downgraded its full-year outlook on Wednesday citing uncertainty about U.S. tariffs, even as it struck an upbeat note about booming demand for AI servers.

Foxconn, Apple's top iPhone assembler and Nvidia's AI server maker, has ridden the crest of the wave for artificial intelligence demand, but is also vulnerable to changes in U.S. trade and tariff policy given its large manufacturing footprint in countries like China and Mexico. Yahoo Finance reports.

💿 Databricks is buying database startup Neon for about $1 billion: Data analytics startup Databricks said Wednesday that it’s buying Neon, a cloud-based database software vendor, for about $1 billion.

It’s the latest big deal for Databricks, which bought artificial intelligence model training startup MosaicML for $1.3 billion in 2023 and paid over $1 billion last year for data optimization startup Tabular. CNBC reports.

👚 American Eagle shares plunge 17% after it withdraws guidance, writes off $75 million in inventory: American Eagle on Tuesday said it is writing off $75 million in spring and summer merchandise and withdrawing its full-year guidance as it contends with slow sales, steep discounting and an uncertain economy.

The apparel retailer said it expects revenue in the first quarter, which ended in early May, to be around $1.1 billion, a decline of about 5% compared to the prior-year period. CNBC reports.

💻 'Magnificent 7' ride back into town: This week's stock market rally could well go down in Wall Street history as one of the most epic on record. The S&P 500 is up by more than 20% in the 36 days since it hit a 15-month low on April 7. The index took just 16 days to hit the 20%-recovery-from-the-lows mark in 2020 and 18 days in 2009.

The difference this time around is there is no tidal wave of monetary or fiscal stimulus helping to grease the wheels of the rally. The bulls aren't just back, they're in the driving seat and the Magnificent 7 - Apple, Amazon, Microsoft, Nvidia, Meta and Tesla - are the engine. Reuters reports.

🚙 Tesla to resume shipping Chinese parts for Cybercab, Semi production in the US, source says: Tesla plans to start shipping components from China to the U.S. for the production of Cybercab and Semi trucks from the end of this month, after the U.S. and China reached a truce over tariffs, said a person with direct knowledge.

The move, being reported by Reuters for the first time, illustrates how the de-escalation of the trade war between the world's two largest economies, following talks in Geneva over the weekend, is having an immediate impact on business activity. Reuters reports.

💻Nvidia stock surges, tops $3 trillion market cap amid flurry of trade optimism

Nvidia stock surged 5.6% on Tuesday, pushing the company's market capitalization to close above $3 trillion for the first time since February as a wave of trade news bolstered prospects for the AI chip giant. Nvidia CEO Jensen Huang said Tuesday during an investment forum in Saudi Arabia — which was attended by President Trump and other Big Tech CEOs — that the AI chipmaker will ship its chips to Saudi Arabian AI company Humain for its massive data center plans.

Also on Tuesday, a report from Bloomberg also indicated the Trump administration may cut a deal that would allow the United Arab Emirates to purchase "more than a million" of Nvidia's AI chips. Yahoo Finance reports.

🤖 AI infrastructure firm TensorWave raises $100 million in latest funding

TensorWave, a Las Vegas-based startup, announced on Wednesday that it has secured $100 million in the latest funding round, as it aims to capitalize on the rapidly expanding AI infrastructure market. The company, however, did not disclose the valuation at which the funding was raised.

The Series A funding round was led by Magnetar and AMD Ventures along with participation from existing partners, including Maverick Silicon and Nexus Venture Partners, and new investor Prosperity7. Yahoo Finance reports.

📻 Sony Stock Rises on Strong Profit, Buyback Plan, But Firm Warns of Tariffs Hit: U.S.-listed shares of Sony Group are surging 5% in premarket trading Wednesday as it reported better-than-estimated quarterly profit and issued a buyback plan, although the Japanese company expects full-year earnings to take a hit because of tariffs.

The electronics and entertainment giant posed fiscal 2024 fourth-quarter earnings per share of 32.63 yen ($0.22), easily beating consensus estimates from Visible Alpha of 24.81 yen. Revenue dropped 24% year-over-year to 2.63 trillion yen ($18.01 billion), missing estimates of 3.00 trillion yen. Yahoo Finance reports.

(All pricing and percent gains are based on Early Pre-Market from 4:00 AM to 7:00 AM Eastern Time)
Benzinga reports.

1) $HWH: HWH International

Total gain: +57.02%

2) $LUCY: Innovative Eyewear

Total gain: 54.04%

3) $ALUR: Allurion Technologies

Total gain: +22.88%

4) $DBVT: DBV Technologies

Total gain: +19.29%

5) $FNGR: FingerMotion

Total gain: +17.57%

The closing price of the top three market percent gainers trading near or above $3 on May 13.
Yahoo Finance reports.

*All pricing and percent gains are based on regular market trading hours from 9:30am to 4:00pm Eastern Time

1) $KLAC: KLA Corporation

Total gain: +35.43%

The stock appeared to be moving on no notable news.

2) $FSLR: First Solar

Total gain: +35.39%

The stock appeared to be moving on no notable news.

3) $APP: AppLovin Corporation

Total gain: +22.20

The stock appeared to be moving on no notable news.

Time (ET) / Report / Period

5:15 am - Fed Governor Christopher Waller speech

9:10 am - Fed Vice Chair Philip Jefferson speech

"If you feel excitement or fear, step aside. Emotions cloud judgment and cause losses."

- Dr. Alexander Elder

Sourced in:
“Come Into My Trading Room: A Complete Guide to Trading”, by Dr. Alexander Elder, published in 2002