What happened last week…
The S&P 500 has made gains in seven of the past 10 trading sessions and is up 6.51% in the quarter.
The United States and China have agreed upon the framework of a trade deal, which will require approval from both President Donald Trump and Chinese President Xi Jinping. After two days of negotiations in London by representatives from both countries, Trump announced, “Our deal with China is done.”
Although final details have yet to be released the trade agreement is reportedly tied to China easing its export restrictions on rare earth minerals and magnets while the United States is said to roll back technology exports and visa restrictions. Commerce Secretary Howard Lutnick said that tariffs on China will not change from their current levels, which is an existing 30% tariff plus a 25% tariff on specific goods. Tariffs imposed by China on the United States will remain at 10%.
In testimony before the House Ways and Means Committee, Treasury Secretary Scott Bessent said that countries “who are negotiating in good faith” with the United States on trade deals could see an extension beyond the 90-day tariff pause that is set to expire in the beginning of July.
Meta Platforms (META) will invest $14.3 billion into Scale AI, which will see founder and CEO Alexandr Wang join Meta. The deal results in Meta owning 49% of Scale AI with Wang becoming the head of a new AI research lab. The structure of the deal could, in theory, help skirt antitrust scrutiny by not outright purchasing the artificial intelligence company.
The inflation rate year-over-year for May matched expectations of 2.4%. Meanwhile, the core inflation rate year-over-year for May beat expectations (2.9%) as it remained at 2.8% for the third straight month.
This week…
On Wednesday, the Federal Open Market Committee will make its interest rate decision. According to the CME FedWatch tool, as of June 13, there is a 96.8% probability that rates will remain at 4.25% to 4.50%. The current rate has been unchanged since last December.
On Thursday, the stock market will be closed in observation of Juneteenth.
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- The Rockline Team
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