Markets react as U.S., China call tariff timeout
05:13 Share

Welcome to Seeking Alpha's Wall Street Breakfast, where we cover the top news for investors every morning. Good morning. Today is Monday, May 12th. I'm Julie Morgan. U.S.-China trade relief, AI lands in Riyadh, and Trump targets Big Pharma.

The U.S. and China have agreed to suspend most tariffs temporarily on each other's goods. Treasury Secretary Scott Besant said in a news conference that they've reached an agreement on a 90-day pause and substantially moved down the tariff levels. Both sides on the reciprocal tariffs will move their tariffs down 115 percent.

So by May 14th, the U.S. will temporarily lower its tariffs on Chinese goods from 145% to 30%, while China will cut its levies on American imports from 125% to 10%. The announcement came after both China and the U.S. held trade talks in Switzerland over the weekend.

which Besant had previously described as productive and constructive. Both countries will continue discussions on economic and trade policy. Following the announcement, Dow, S&P and Nasdaq futures are in the green. The Dow is up 2.1 percent, the S&P 500 is up 2.7 percent, and the Nasdaq is up 3.8 percent.

Scale AI, a San Francisco-based startup backed by Amazon and specializing in AI product development, is set to open an office in Saudi Arabia by the end of the year as part of its broader expansion in the region. Bloomberg reported that a company's spokesperson confirmed the plans for a new location in Riyadh and added that Scale AI also intends to establish an office in the United Arab Emirates.

Founded in 2016, Skill AI provides data labeling and preparation services to support AI training for companies such as OpenAI and Microsoft.

President Trump said that he will sign an executive order aimed at slashing prescription drug prices in the U.S., reviving a plan from his first-term agenda, and instituting a most-favored-nation policy. He wrote on Truth Social on Sunday evening that prescription drug and pharmaceutical prices will be reduced almost immediately by 30 to 80 percent.

The president plans to sign the order on May 12th today at 9 a.m., directing the U.S. Department of Health and Human Services to adopt the policy, which would set prescription drug prices to match other nations. Trump went on to say on Truth Social that he would be instituting a most favored nations policy, whereby the United States will pay the same price as the nation that pays the lowest price anywhere in the world.

He said the U.S. will finally be treated fairly and its citizens' health care costs will be reduced by numbers never even thought of before. The stock price of many Asian pharmaceutical companies declined after Trump's announcement. There's a link to that article in the transcript of this podcast. Now for a look at what's trending on Seeking Alpha. The top EV battery maker, Cattle, is seeking to raise $4 billion in a Hong Kong listing.

Evercore ISI says the bear market is over. New bull will be a grind and not a moonshot. And we have a look at your earnings week ahead with major companies like Plug Power, Walmart, and Alibaba reporting. On our Catalyst Watch for the Day, Samsung will hold a launch event for the Galaxy S25 Edge. And NBCUniversal and Fox will have upfront week presentations in New York City.

Now for a look at the markets today ahead of the opening bell. As we said, Dow, S&P and Nasdaq futures are in the green. Crude oil is also in the green up 3.2% at nearly $63 a barrel. Bitcoin is up 0.2% at $104,000. Gold is down 3% at $3,222.

Novo Nordisk is on our list of the biggest movers of the day pre-market. NVO was down 5% after Eli Lilly's ZepBound outperformed WeGovi in a head-to-head trial, showing 47% greater weight loss. On today's economic calendar, the Fed's Adriana Kugler speaks on the economic outlook before the National Association for Business Economics and the Central Bank of Ireland's International Economic Symposium.

That's it for today's Wall Street Breakfast. Thanks for listening. To take full advantage of Seeking Alpha, join the highest quality community of real investors discussing stocks and ETFs at seekingalpha.com slash subscriptions. I'm your host, Julie Morgan. Go out and make it a great day.