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Good morning investors!

If this is your first time reading, welcome to The Investor’s Edge — a thriving community of over 23,000 subscribers striving to be better investors with an edge in the market.

Every Wednesday we publish “The Mid-Week Wrap-Up” — your ticket to being well informed and staying ahead in the investment game!

This report is designed to help investors of all skill levels break down important stories/topics within the stock market. And best of all, we cut through all of the BS and give you exactly what you need to know in easy to digest, bite sized pieces of content.

This article is designed to truly give you that EDGE in the day ahead!

Grab your afternoon pick me up and let’s dive in.

Market Talk

The major indexes are surging to start the week on the heels of the U.S.-China trade deal news.

3 Stories Moving the Market

These are some of the biggest stories so far this week that are having an influence on market action.

Surprise U.S.-China trade deal gives global economy temporary reprieve

The US and China have agreed to a 90-day tariff truce, significantly reducing duties on hundreds of billions in traded goods. This marks a major cooling of the trade war that rattled markets and strained global supply chains. The US will lower its recently raised tariffs on Chinese goods from 145% to 30%, while China will cut its retaliatory tariffs on US goods from 125% to 10%. Non-tariff restrictions, including China’s halt on critical mineral exports, have also been reversed.

🔑 Key Points

• The deal suspends or cancels recent tariffs for 90 days, giving both sides time to negotiate further.

• The US retains an additional 20% fentanyl-focused tariff, aimed at curbing illegal drug flows.

• Even if the truce ends, reimposed tariffs would be lower than the prior peak—54% for US tariffs, 34% for China's.

• China exported $440B in goods to the US in 2024 (mostly electronics and iPhones), while the US exported $145B (led by soybeans and energy).

• Markets rallied on the news—investors anticipate a rebound in trans-Pacific trade, especially in shipping and manufacturing.

👀 What You Need to Know

While the tone is now cooperative, the 90-day pause is just that, a pause. The structural trade imbalance remains unresolved, and political posturing on both sides is far from over. This truce may buoy short-term sentiment, but volatility could return if talks stall. Investors should remain nimble: sectors tied to global trade like semis, industrials, and shipping, stand to gain most from continued progress.

April CPI cools slightly but tariff pressures are just beginning

Inflation ticked lower in April, with the Consumer Price Index (CPI) rising 0.2% for the month and 2.3% year-over-year, its lowest annual reading since February 2021. Core CPI, which excludes food and energy, also rose 0.2% for the month and 2.8% from a year ago. While largely in line with expectations, the data does not yet reflect the full impact of Trump’s new tariffs, which are set to ripple through the economy in the coming months.

🔑 Key Points

• CPI rose +0.2% in April, with the 12-month rate slowing to 2.3% (vs. 2.4% estimate)

• Core CPI was also up 0.2% MoM and 2.8% YoY, with shelter costs (+0.3%) driving more than half the monthly gain

• Energy prices rebounded (+0.7%) after a March decline, while food fell slightly (-0.1%)

• Used car prices dropped again (-0.5%), and apparel prices slid (-0.2%)

• Egg prices plunged -12.7% MoM, but remain nearly +50% YoY due to earlier spikes

👀 What You Need to Know

This report likely marks the last “clean” CPI print before the tariff fallout begins. Trump’s across-the-board 10% import duty and the short-lived 145% spike on Chinese goods haven’t yet flowed through to consumer prices but they will soon. The temporary 90-day China truce buys time, and while some companies may absorb cost increases short term, that’s unlikely to last into summer. Thursday’s Producer Price Index (PPI) will offer a key look at upstream inflation, and a first glimpse of how tariffs are filtering through wholesale prices.

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Trump signs Executive Order aimed at lowering drug prices

President Trump signed an executive order Monday aimed at slashing prescription drug costs by linking U.S. prices to those paid by other nations. The policy invokes a “Most Favored Nation” clause, pushing the U.S. to pay no more than peer countries, many of which negotiate dramatically lower drug prices. While details remain vague, the order marks Trump’s most aggressive attempt yet to disrupt pharmaceutical pricing, with potential implications across Medicare, Medicaid, and private insurance.

🔑 Key Points

• The order gives Health Secretary Robert F. Kennedy Jr. 30 days to negotiate with drugmakers and 180 days before new rules or import restrictions may be enacted.

• Trade retaliation is on the table, targeting countries with “unreasonable and discriminatory” pricing that undercut U.S. costs.

• No formal scope defined, but the White House says Medicare Part D will be a strong focus; Medicaid and private plans may also be impacted.

• Industry groups say it could cost pharma $1 trillion over the next decade, triggering exits from low-margin government programs.

• Trump framed the move as ending a system where American consumers “subsidize socialist healthcare systems.”

👀 What You Need to Know

This order ramps up political pressure on Big Pharma and could set off a multi-front policy fight. If the 180-day negotiation window fails, enforcement could bring broad changes to pricing and availability across Medicare and potentially private insurance. Investors should watch large-cap pharmaceutical stocks, especially those with high U.S. exposure, as well as specialty drugmakers tied to Medicare Part D.

In Other News

In this section we'll be curating a selection of news headlines we think you'll find interesting. If a topic catches your eye, click the provided links to read more about it.

• White House announces $600 billion Saudi investment in U.S. during Trump visit

• UnitedHealth Group CEO Andrew Witty steps down, company suspends annual forecast

• Apple could hike iPhone prices 'independent' of tariff pressure

• OpenAI negotiates with Microsoft for new funding and future IPO

• AMD announces $6 billion buyback; shares climb 6%

• Eli Lilly's Zepbound outperforms Novo Nordisk's Wegovy for weight loss in trial

• Boeing strikes ‘largest-ever’ 787 jet order with Qatar Airways

• China lifts Boeing delivery ban as tariff war cools

• Tesla to resume shipping Chinese parts for Cybercab, Semi production in the US

• Uber to Launch Autonomous Vehicles in Saudi Arabia This Year

• Google is reportedly planning to unveil a Pinterest alternative at I/O 2025

• Waymo “recalls” 1,200 self-driving vehicles for potential collisions with roadway barriers, software patch fixes issue

• Coinbase jumps 24% on S&P 500 inclusion, biggest gain since post-election pop

• Shopify stock jumps more than 14% on news of Nasdaq 100 inclusion

• SMCI Soars After Announcing $20B Partnership with Saudi Data Center Developer DataVolt

• China's JD.com tops quarterly revenue estimates as consumer demand holds up

• Baidu’s robotaxi unit plans Europe expansion

• House Republicans advance Trump’s tax bill — but ‘SALT’ deduction still undecided

The Second Half

Earnings from several mega cap names are sure to move markets over the next few days, while all eyes will be on the nonfarm payrolls report on Friday.

Earnings Reports

Earnings season carries on as several companies we cover are scheduled to report. Here are the names we will be watching to end the week:

• Wednesday 5/7: --

• Thursday 5/8: Walmart, Alibaba, and Deere & Co

• Friday 5/9: --

Here is the calendar of earnings releases scheduled for the rest of the week:

Economic Reports

There are a number of economic reports on the calendar to end the week. We get another key inflation report in the PPI, as well as retail sales, initial jobless claims, consumer sentiment and several housing reports.

Here is the full calendar of events scheduled for the remainder of the week:

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Thank you for reading this edition of the Mid-Week Wrap-Up.

Until next time investors!

Mark & Chris

The Investor’s Edge

Disclosure

This is not investing advice. It is very important that you do your own research and make investments based on your own personal circumstances, preferences, goals and risk tolerance.