Stocks rally on U.S.-China 90-day Tariff Pause

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Main Content:

1.    Major indexes weekly performance 

2.    U.S stocks weekly wrap 

3.    S&P 500 sector index weekly/month performance 

4.    China/Hong Kong stocks weekly wrap 

5.    Singapore stocks weekly wrap 

6.    Major indexes weekly chart and technical support & resistance levels

U.S.

For the week of May 16, U.S. equities posted strong gains, with positive sentiment largely driven by news that the U.S. and China had agreed to a substantial de-escalation of trade tensions following talks in Switzerland over the weekend. The Nasdaq Composite(COMP) led the way for major indexes, advancing 7.15%, while the S&P 500 Index(SPX) and Dow Jones Industrial Average(DJI) gained 5.27% and 3.41%, respectively. Refer to below major indexes performance table for the week.

Key highlights for the week and next:

1.    SPX back into positive territory in 2025 this week, mainly driven by news on trade policies in the week, with U.S. and China had announced in last weekend to significantly reduce tariffs for a period of 90 days while both working towards a longer-term deal. 

During the 90-day period, the U.S. agreed to reduce its tariff on most Chinese goods down from 145% to 30%, while China’s levies on U.S. imports will drop from 125% to 10%. Stock markets rallied sharply, and interest rates rose on the news. 

2.    Several other trade-related headlines—including news of an agreement that will allow Saudi Arabia to purchase large amounts of advanced artificial intelligence chips from U.S. companies—appeared to help fuel the positive move in stocks during the week, putting most indexes firmly back above their April 2 levels by Friday’s close. 

3.    Inflation cools in April as reported. April’s consumer price index (CPI) rose 2.3% year-over-year, a tick below consensus estimates for a 2.4% increase and the slowest annual pace since early 2021, before inflation began to surge and the Federal Reserve started its rate-hiking cycle. On a month-over-month basis, both the headline and core (excluding food and energy) CPI rose 0.2%, below estimates for 0.3% increases. 

SPX sectors in play

All 11 SPX sectors recorded weekly gains, Technology (XLK) and Consumer Discretionary (XLY) led the gains. Refer to below SPX sectors ETF weekly performance table.

Indexes technical levels

The SPX index was back into positive territory in 2025 by Friday, added 1.3% year-to-date (YTD), while the COMP index still needs 0.52% to back into par. Next major resistance level for SPX to watch is at around 6130 level. Click below three indexes for their weekly charts.

DJI weekly chart

SPX weekly chart

Nasdaq weekly chart

China/HK

Mainland China stock markets advanced for the week after news of the de-escalation in U.S. trade tensions. The Shanghai Composite Index(SSE) edged up 0.76% while the blue-chip CSI 300 rose 1.12%. In Hong Kong, the benchmark Hang Seng Index added 2.09%. (refer to the above weekly performance table).

Key highlights for the week and outlook for China/HK:

1.    Chinese stocks rallied early in the week after the outcome of tariff negotiations with the U.S. last weekend. The deal with the U.S., which called for both sides to temporarily lower tariffs on each other’s imports, exceeded expectations in China and ended up meeting nearly all of Beijing’s core demands. However, stocks pared their gains starting on Wednesday as a more favorable tariff outlook dimmed hopes for a substantial stimulus package from Beijing. 

2.    Expectations that a spiraling trade war with the U.S. would spur the government to ramp up measures to bolster the economy have supported Chinese stocks in recent weeks. Earlier in May, the People’s Bank of China unexpectedly cut its reserve requirement ratio—the amount of cash that banks must keep in reserve—by half a percentage point and trimmed the seven-day reverse repurchase rate by 10 basis points to 1.4%. However, hopes for further government support have been tempered in the near term as the U.S. and China work toward a broader agreement over the next three months. 

Refer to below .HSI stocks top 40 performance of the week.

Click below SSE and .HSI indexes for their weekly charts. 

SSE weekly chart

.HSI weekly chart

Singapore

The Straits Times Index (STI) edged up 0.56% to close at 3897.87 point this week, marking its 5^th consecutive weekly gains. Stock momentum remained relatively muted this week.

Top weekly gainers including YZJ Ship, HKLand, DBS and UOB were among top gainers as well. DBS total return including 75c dividend is 3.76%, the bank went ex-dividend on 16 May. Refer to below table for STI index stocks weekly performance.

Click below for STI weekly chart.

STI weekly chart

Source: Some contents and data excerpted from various public market reports. Please comment to claim copyright ownership of any material, and I will remove it if necessary.