Global Stocks Recoup Tariff Losses; President Trump Visits Saudi Arabia
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Good morning, I'm Nathan Hager. And I'm John Tucker. Here are the stories we're following today. Stocks around the world have recovered their losses from last month's Rose Garden tariff announcement from President Trump. That's after the U.S. and China agreed to roll back triple-digit tariffs against each other for 90 days. In White House remarks heard on Bloomberg Radio, the president called it a total reset of the U.S.-China relationship.

The relationship is very good. We're not looking to hurt China. China was being hurt very badly. They were closing up factories. They were having a lot of unrest. But President Trump did not mention that the deal met nearly all of China's demands, including suspension of the so-called reciprocal tariff rate of 34 percent and a point person for further talks. Still, Caroline Freund, a non-resident senior fellow at the Peterson Institute, says both sides had good reason to de-escalate.

It was really unsustainable for both countries for different reasons. It was unsustainable for the U.S. because there's a lot of things we need from China. And it was unsustainable for China because they need to manufacture things and sell them. And the U.S. is a huge market.

So both sides really had a lot of incentive to make a deal. It's Caroline Freund of the Peterson Institute, and China may have made at least one concession to the U.S. Sources tell Bloomberg News China has lifted a month-long ban on airlines taking deliveries of Boeing planes. And, of course, investors were cheering the U.S.-China trade agreement, the S&P 500 surging 3.25%, while the Nasdaq rallied 4.3%, as some Wall Street titans also applauding the easing of tensions.

we caught up with Citadel founder Ken Griffin. To see the US Secretary of Treasury come to a meeting of the minds with the Chinese leadership was an important moment between our two nations. And I'd like to take this not as a moment in time where we reflect upon the fragility of what's been accomplished, but rather to focus on the fact that we have opened the doors to a negotiation

And I do believe that the actions of both parties makes it clear that we want to find common ground. Citadel founder Ken Griffin making the comments in an interview with Bloomberg's Shanali Basik for an episode of the upcoming series Bullish for Bloomberg Originals of the Four Seasons in Miami. Well, John, President Trump is in Saudi Arabia. He has arrived for the start of a four-day tour of the Middle East, greeted personally by Crown Prince Mohammed bin Salman at the tarmac.

The president's treasury secretary, Scott Besant, is also in the kingdom attending a Saudi U.S. investment forum in Riyadh. And Besant talked about the chances of a trade agreement with the European Union. Europe may have a collective action problem that the Italians want something that's different than the French.

But I'm sure at the end of the day, we will reach a satisfactory conclusion. And Treasury Secretary Scott Besson added the U.S. has had very productive discussions with Japan, and he praised conversations with Indonesia as well as a, quote, very good proposal from Taiwan. And the easing of global trade tensions has won Wall Street firm boosting its price target for U.S. stocks. Let's get that story from Bloomberg's Gina Cervetti. Cool.

Goldman Sachs Group says the Buy America trade may be back. The firm now sees the S&P 500 index reaching 6,500 in the next 12 months. That's 300 points higher than its previous estimate and a gain of about 11% from yesterday's close.

Goldman had cut its S&P 500 forecasts twice in March, citing higher recession risk and tariff-related uncertainty. The firm says while such concerns have eased with the latest truce between the U.S. and China, the broader earnings outlook still remains uneven. In New York, Gina Cervetti, Bloomberg Radio. All right, Gina, thank you. And as investors remain focused on the latest trade developments, they'll also have a key economic report to digest later this morning when we get the Consumer Price Index for the month of April.

Let's get a preview now from Bloomberg's Michael McKee. This is the first inflation report that may offer evidence that Trump's import taxes are raising prices.

The consensus is for a fairly strong increase in headline and core prices, even as gasoline fell in April. Autos and some consumer goods may move higher, although the biggest increases won't come until May or June. Economists will still be watching the traditional inflation sources as well, particularly housing, to see if non-Trump inflation is making progress towards the Fed's 2% target.

Michael McKee, Bloomberg Radio. All right. Thanks, Mike. Staying in Washington, Republicans on the House Tax Committee, they've released details of Donald Trump's multi-trillion dollar tax cut bill. That story from Bloomberg's Amy Morris. The legislation aims to cut taxes by more than $4 trillion and reduce spending by at least $1.5 trillion over a decade. It also raises the state and local tax cap to

$30,000 for individuals. Former North Carolina Republican Congressman Pat McHenry wonders if that will be enough for some lawmakers. The question of whether or not $30,000 is going to be sufficient for them, we're going to see, and we're going to see in a very public way. These are the most public

Republicans in the House of Representatives. The legislation also proposes raising the debt limit by $4 trillion. It does not include President Trump's proposal for a millionaire tax bracket. In Washington, Amy Morris, Bloomberg Radio. All right, Amy, thank you. And the U.S. appears to be on track for a very bad tourism year. According to new data from the World Travel and Tourism Council, the U.S. is set to lose $12.5 billion in travel revenue in 2025.

Visitor spending is estimated to fall under $169 billion by year's end. These numbers represent a decline of around 7% year-over-year, a decline of 22% since tourism peaked in the U.S. in 2019. The decline is attributed to lingering COVID-era requirements, a strong dollar, and a shift in people's views due to the current administration's America First rhetoric and policy.

All right, thanks, Nathan. It's time now for a look at some of the other stories making news in New York and around the world. And for that, we're joined by Bloomberg's Michael Barr. Michael, good morning. Good morning, John. It is the start of day two of testimony in the sex trafficking and racketeering trial of music mogul Sean Diddy Combs.

Yesterday, prosecutors played the CNN video for the jury. The surveillance video shows Combs chasing then-girlfriend Cassie Ventura down a hotel hallway, knocking her to the floor and kicking her. During opening statements, prosecutors say it's what happened after Ventura tried to escape one of the sex performances. The defense claiming the video shows a fight over a cell phone.

His own lawyers acknowledge Combs was violent at times, arguing that does not make Combs a sex trafficker or part of a racketeering conspiracy. Attorney Areva Martin talked about the challenge for the government. We know a lot of people don't understand why victims of sex trafficking don't come forward sooner and faster. Why don't they go to the police? Why don't they report this to friends and to others? So that's going to be the question these jurors have to grapple with.

Today, Cassie Ventura is expected to take the witness stand. Hamas has freed the last living American citizen held hostage in Gaza, Eden Alexander. Alexander met up with his younger brother in a joyous celebration. Alexander was captured during a Hamas attack in October 2023. Former President Joe Biden is being evaluated after a small nodule was discovered on his prostate.

A spokesman told the New York Times Mr. Biden, who is 82, spent last Friday in a hospital in Philadelphia and says the nodule required further evaluation. Two New York Republican lawmakers, Mike Lawler and Nick LaLotta, vowed to block their party's tax legislation unless the proposed $30,000 limit on the federal income tax deduction for state and local taxes is increased.

Lawler, speaking to Bloomberg, called the proposed SALT limit woefully inadequate. When the Tax Cuts and Jobs Act expires at the end of this year, SALT comes back unlimited. And so in order for there to be a tax bill that would actually put a cap in place, it has to adequately address the concerns of my constituents. Other Republicans, including Andrew Garabino, Elise Stefanik, and Young Kim, have also rejected the SALT cap.

Global news 24 hours a day and whenever you want it with Bloomberg News Now. I'm Michael Barr. This is Bloomberg, John. All right, Michael, thank you.

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And that brings us to 5-10 on Wall Street. Time now for the Bloomberg Sports Update. And for that, it's John Stash here. John, good morning. Good morning, John. The Knicks in game four with the Celtics at the Garden found themselves trailing for the fourth straight time in the series. Boston had a 14-point lead in the third quarter. Jalen Brunson led the Knicks back. Brunson still looking, falling away, puts it up. That's good. Jalen Brunson does it again. It's a two-point game. Timeout Boston.

I

On ESPN, the Knicks won that third quarter 37-23. Brunson had more than half those Knick points. They went on to win 121-113, now have a three games to one lead. Brunson finished with 39 points. Carl Anthony Towns and Mikael Bridges both added 23. Jason Tatum was tremendous in leading the Celtics. He scored 42 points. He made seven three-pointers and then Tatum's night

and very possibly his season came to an end with three minutes left a non-contact lower leg injury he was seen later in a wheelchair with his head in his hands Tatum will have an MRI today but the Celtics may very well have to try and make the series come back without their star player Golden State has been without its best player and without Steph Curry the Warriors lost for a third straight time Minnesota won 117-110 the T-wolves also up 3-1 the Dallas Mavericks who took

Considerable heat for trading Luka Donsas. Got some good news. Winning the draft lottery, they had a less than 2% chance. The Mavs will now be expected to draft Duke's Cooper flag. Stanley Cup playoff home wins for Carolina and Edmonton, both up 3-1. Yankees in Seattle hit four home runs, two by Trent Grisham. They won 11-5, but the Yanks suffered what looked like a serious injury to Eswaldo Cabrera. Hurt his ankle sliding at home. He was taken off the field in an ambulance.

Mets scored by the ninth, beat the Pirates 4-3. Nationals lost in Atlanta 4-3, and the Red Sox lost in Detroit 14-2. John Staschauer, Bloomberg Sports.

Coast to coast on Bloomberg Radio. Nationwide on Sirius XM. And around the world on Bloomberg.com and the Bloomberg Business App. This is Bloomberg Daybreak. Good morning. I'm Nathan Hager. The U.S. says it is now in a good position to negotiate with China after last weekend's trade talks in Geneva. But the rollback of 145% tariffs on China down to 30%

may validate Chinese President Xi Jinping's decision to hold firm in the standoff. And now President Xi says China stands ready to defend multilateral trade. There are no winners in tariff wars or trade wars, bullying or hegemonism.

only leads to self-isolation. That was Chinese President Xi Jinping speaking through an interpreter in an economic forum with Latin American states in Beijing. Joining us now, Bloomberg News senior editor Bill Ferrys. Bill, good morning. I know we're only a day away from the announcement of the outcome of the Geneva talks, but is it too soon to say who's got an upper hand now, the U.S. or China? Good morning.

Good morning, Nathan. Yeah, it does seem that China has really gotten a lot of its key demands met so far. I mean, when these very high U.S. tariffs went in place, 145 percent on Chinese imports, you heard from Trump administration officials saying that China couldn't afford to hold out.

that they needed the U.S. market more than the U.S. needed the Chinese market, and that eventually, you know, that China wanted to have a meeting and would call a meeting. In the end, it looked like both sides were feeling some economic pain, but the end result from this weekend really does seem to be we're back to where we were in late March, early April with the U.S. 30 percent tariffs.

and lower Chinese 10% tariffs. It's not clear that there's any agreement on market access. It's not clear that there's really very much achieved beyond a very tumultuous past six or seven weeks.

And what Scott Bessent was saying today in Saudi Arabia was that they have opened this channel of formal talks between the U.S. and China. That's not necessarily something you needed the tariffs to do, but it is the result of what's been happening over the last several weeks. And to your point, Bill, the Treasury Secretary says that the first Trump trade deal with China gives them a very good framework to work with to try to get a

a newer deal, rebalancing of trade. But is that tougher now to get a rebalancing since China's held out the way it has?

Yeah, I think China is going to see, you know, they're in this 90-day period where they're supposed to make more progress on limiting the export of products that go into making fentanyl. They're looking to see if there's agreements they can make on certain sectors. But I think, you know, China never fully bought into that original trade deal that required them to buy $200 billion in U.S. goods.

I think it's going to be hard to increase that kind of an agreement when you haven't met the terms of the initial agreement. So it's not clear what the next 90 days will bring. There will be more talks. There might be progress on fentanyl. Part of the 30 percent tariff on Chinese goods is this 20 percent tariff.

that's supposed to be based on progress on fentanyl. So there is a chance that could come down. One thing Scott Bessett made clear is that he sees 10% as a floor going forward, and that's still significantly higher than the tariffs Chinese goods faced when the administration took office in January. And now, as you mentioned, the focus does turn to the Middle East. It's not just Treasury Secretary Bessett who's there, but President Trump has arrived. He's getting a tour of

With the Saudi crown prince, what kind of outcomes can we expect from the president's visit to the Middle East? Got about a minute left.

I would expect to get some details about Saudi and more broadly Middle Eastern investments in the U.S. At one point, Donald Trump was asking for more than a trillion dollars in investments to come in from Saudi Arabia and the Middle East. I don't know if we'll get all of that, but that's going to certainly be drumming up business is going to be a big part of this.

There is going to be some questions about this ceasefire with the Houthis and whether the Red Sea will really reopen to shipping. It hasn't happened yet. And I don't think there's a lot of expectations that that's on the horizon. But it's certainly going to be we've I expect we'll see a lot of a lot of big announcements from the president on trade and investment.

This is Bloomberg Daybreak, your morning podcast on the stories making news from Wall Street to Washington and beyond. Look for us on your podcast feed by 6 a.m. Eastern each morning on Apple, Spotify, or anywhere else you listen. You can also listen live each morning starting at 5 a.m. Wall Street time on Bloomberg 1130 in New York, Bloomberg 99.1 in Washington, Bloomberg 92.9 in Boston, and Bloomberg 99.1 in Washington.

and nationwide at Sirius XM channel 121. Plus, listen coast to coast on the Bloomberg Business app now with Apple CarPlay and Android Auto interfaces. And don't forget to subscribe to Bloomberg News Now. It's the latest news whenever you want it in five minutes or less. Search Bloomberg News Now on your favorite podcast platform to stay informed all day long. I'm John Tucker. And I'm Nathan Hager. Join us again tomorrow morning for all the news you need to start your day right here on Bloomberg Daybreak.

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