What Wall Street's bright minds think about the US-China trade deal

Jennifer Sor,Huileng Tan,Nora Redmond

Tue, May 13, 2025, 2:46 PM 10 min read

• Investors cheered the US-China trade talks, sending stocks soaring connected Monday.

• While the woody has removed immoderate risks weighing connected stocks, immoderate accidental tariffs are inactive a threat.

• Here's what immoderate of Wall Street's apical commentators person to accidental arsenic US-China commercialized tensions cool.

The US-China commercialized deal gave markets a immense boost connected Monday, but advancement connected tariffs implicit the play inactive leaves immoderate risks to stocks and the system intact, apical Wall Street commentators say.

The US is acceptable to little the tariff complaint connected Chinese goods from 145% to 30%, portion China plans to chopped its tariff complaint connected US goods from 125% to 10% for 90 days arsenic negotiations continue.

Investors, who had been intimately watching for signs of easing successful caller weeks, are relieved. Yet the absorption is varied among immoderate of Wall Street's apical voices, who spot an improved outlook for the US system but are inactive eyeing risks to the marketplace ahead.

Here's what immoderate of Wall Street's brightest minds person to say.

Barclays connected Tuesday walked backmost its earlier telephone for a mild recession to deed the system successful the 2nd fractional of this year.

While the system volition apt dilatory successful the coming quarters, the slope expects GDP to turn 0.5% year-over-year by the 4th fourth of 2025, and turn by 1.5% year-over-year successful the 4th fourth of 2026.

"We deliberation these little tariff rates connected China volition beryllium considerably little disruptive for home activity, labour markets, and little inflationary, than anterior rates. According to indicators of inbound instrumentality traffic, these rates had dramatically reduced commercialized flows betwixt the 2 countries successful caller weeks," the steadfast said successful a enactment connected Tuesday.

The commercialized woody isn't signaling an each wide for markets, Allianz's main economical advisor said. That's partially due to the fact that tariffs volition inactive stoke inflationary pressures successful the economy, adjacent though a little complaint connected imports volition let for immoderate economical enactment betwixt the US and China, helium said.

"It's not a consecutive line. And you're going to beryllium truly frustrated erstwhile you perceive the sentiment of economists similar me," El-Erian said of his marketplace outlook erstwhile speaking Monday with CNBC.

He said economical enactment would apt beryllium higher than expected for the adjacent 90 days due to the fact that of short-term optimism connected the commercialized agreement. Still, El-Erian saw the Federal Reserve issuing less complaint cuts successful 2025 and pushing them further down the roadworthy arsenic it monitors inflation.

"My ain gut feeling is we volition get immoderate slowing successful the economy. We volition get immoderate higher inflation. But astir CEOs volition stay successful the wait-and-see," helium said, adding that determination was inactive uncertainty astir the economic, political, and nationalist information implications of the deal.