Markets React Positively as Tariff Tensions Ease and Inflation Drops

Last week closed on an optimistic note, driven by easing tariff tensions and cooler-than-expected inflation reports.

The U.S. and China are currently pausing tariff actions as they negotiate a potential deal, leading to positive market responses.

Moreover, indications suggest that the Federal Reserve’s concerns about inflation may be unwarranted. For instance, economists had projected a 0.3% rise in both the headline and core Consumer Price Index (CPI) for April.

However, both measures increased by only 0.2%.

In addition, the Producer Price Index (PPI) fell by 0.5% in April, in contrast to expectations of a 0.3% rise.

While these figures are reassuring, they are somewhat overshadowed by Moody’s recent downgrade of the U.S. credit rating from AAA to Aa1. Consequently, Treasury yields have increased, with the 10-year yield reaching approximately 4.48%, up from 4.16% at the end of April.

Despite this downgrade, I remain confident that Treasury Secretary Scott Bessent will manage Treasury auctions more effectively than his predecessor, Janet Yellen.

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A Historical Transformation in the Market

It is essential not to let short-term distractions such as tariffs or credit downgrades divert your attention.

In reality, we are experiencing the early stages of a significant market transformation.

This is a time when select stocks could soar by 1,000% or more within months, while others fade into obscurity.

This transformation is likely to concentrate wealth and power in fewer hands, ultimately undermining the foundations of middle-class prosperity.

I share these concerns because I have witnessed these changes firsthand.

That’s why I have recorded a special video briefing.

This crisis could also represent a significant financial opportunity—if approached wisely.

Go here to watch my presentation now.

Sincerely,

Louis Navellier

Editor, Market 360