Good Morning! A pause on tariffs might just salvage the year for retailers, though Trump’s keeping a 120% tariff on cheap Chinese goods. Tesla rejoined the $1T club after a 40% rally since April 21.

Coinbase jumped 11% on news of its S&P 500 inclusion. Eric Trump’s American Bitcoin is going public. Wall Street still isn’t sold on Trump's new drug pricing order, and Memorial Day travel could hit a new record. 

Plus: Perplexity is eyeing a $14 billion valuation, Google refreshed its 'G' logo (probably paying McKinsey $10M for it), AI could soon manage iPhone power and hidden hotel fees are now banned.

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SQUEEZ OF THE DAY

Sell The Rip?

The markets absolutely ripped yesterday, and Monday’s rally put stocks on the edge of a new bull market. The Dow closed up 1,160 points, the S&P 500 up 3.3%, and the Nasdaq roared nearly 4.4%.

It was all thanks to a new truce between the U.S. and China, and the rally even made up for the losses from April’s Liberation Day sell-off.

The rally was led by Apple, Tesla, Amazon, Nvidia, and those Big Tech stocks all ended up between 5 and 8%. Treasury yields jumped, the VIX dropped below 20, and gold and the yen fell.

Traders are now betting on just two Fed cuts in 2025 instead of three, which means the recession trade is getting unwound.

The key reason was a temporary tariff rollback with U.S. levies on China dropping 30% and China’s sliding to 10%. No one saw it coming, and some investors were prepping for an 80% hike. Treasury Secretary Scott Bessent called the weekend talks “very productive,” and Trump says he might talk with Xi this week. 

But let’s be clear, this wasn’t a full-blown deal; it was a ceasefire and is basically a 90-day timeout to keep markets calm. There’s still no framework, no final agreement, and no real clarity on what happens in three months when this pause expires. China could be opportunistic and flood the U.S. with exports. And if talks collapse, tariffs could snap back.

That’s why some investors are already eyeing the exit. “We bought the dip, now we’re holding,” said one strategist. “But we’re debating whether to sell the rip.”

The pain trade is real, and those who missed the rebound are now chasing momentum into overbought territory. 

And even with Monday’s rally, the S&P has only gained back about half its tariff-driven losses since February.

Takeaway: Markets are betting big on optimism and a low recession risk. The rally is real, but some are cautioning ‘buying the rip’ and say the opportunity to buy low may be over. And, after all, with a 3-month pause, you can never be certain what will happen when Trump’s at the helm.

HEADLINES

Top Reads

• US-China tariff pause may save the year for retailers (YF)

• Trump says he and Xi likely to talk tariffs by 'end of the week' (YF)

• US-China tariff truce could be the start of a financial revolution (Fox)

• Despite China trade deal, Trump maintains 120% tariff on cheap goods (Axios)

• Tesla rejoins $1T club as tariffs ease (YF) 

• Bill Gates warns Elon Musk’s DOGE cuts will cause ‘millions of deaths’ (CNN)

• Trump says European Union is "nastier than China" (Axios)

• Coinbase shares jump on S&P 500 index inclusion (BB)

• Coinbase aims to become world's No. 1 financial service app in 10 years (CNBC)

• Trump’s eye on Qatar’s $400M luxury jet is already causing a stir (CNBC)

• McDonald’s announces plans to hire 375k workers with Trump Labor secretary (CNBC)

• AI firm Perplexity eyes $14 billion in valuation in fresh funding round (YF)

• Eric Trump’s American Bitcoin going public (CNBC)

• Trump talks with Apple's Cook as iPhone price hikes loom (YF)

• CrowdStrike CEO sells $1B in shares (BB)

• Wall Street has questions about impact of Trump's drug pricing order (YF)

• Memorial Day travel to set new record as drivers take advantage of gas prices (Fox)

• Google refreshes its 'G' logo (LI)

• Hidden hotel fees are now banned (CNBC)

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CAPITAL PULSE

Markets Rundown

Market Update

• Stocks closed sharply higher on Monday as the U.S. and China agreed to a 90-day reduction in tariffs following trade talks in Switzerland.

• Consumer discretionary and technology sectors led the gains, while utilities lagged, indicating a risk-on sentiment.

• President Trump issued an executive order aimed at reducing U.S. pharmaceutical prices to align more closely with those in other developed countries.

• Bond yields rose, with the 10-year Treasury yield at 4.47%, as markets adjusted expectations for the next Federal Reserve interest-rate cut to September from July.

• Asian and European markets finished higher on the tariff announcement, and the U.S. dollar advanced against major currencies.

• WTI crude oil continued its rise above $60 a barrel as trade tensions eased.

Economic Data Highlights

• U.S.–China tariff agreement: The U.S. agreed to cut tariffs on most Chinese imports to 30% from 145%, while China reduced tariffs on most U.S. goods to 10% from 125%, both for a 90-day period.

• Federal Reserve outlook: Markets now anticipate two rate cuts in 2025, down from three to four the previous week, with the next cut expected in September.

• Congressional tax legislation: The House Ways and Means Committee released a draft to extend provisions of the 2017 Tax Cuts and Jobs Act, including maintaining the top individual marginal tax rate and extending the estate tax exemption.

Reported Earnings

• TeraWulf Inc. (WULF) – Reported May 9: Delivered Q1 results in line with expectations. The company highlighted its continued focus on expanding zero-carbon energy-powered mining operations and emphasized its commitment to sustainable growth strategies.

• Enbridge Inc. (ENB) – Reported May 9: Posted Q1 earnings that met analyst forecasts. The company reaffirmed its 2025 financial guidance and discussed progress on key infrastructure projects aimed at enhancing energy transportation efficiency.

Earnings Today

• Berkshire Hathaway Inc. (BRK.B) – Scheduled to release Q1 2025 earnings today. Investors will look for insights into the company's operating performance and updates on its diverse portfolio of businesses.

• Under Armour Inc. (UA) – Set to announce Q1 2025 financial results today. The market will be attentive to the company's progress on its restructuring efforts and outlook for the remainder of the fiscal year.

• Nu Holdings Ltd. (NU) – Expected to report Q1 2025 earnings today. Analysts anticipate updates on customer growth, revenue performance, and expansion plans in Latin America.

Movers & Shakers

• (+) NRG Energy ($NRG) +26% after a $12 billion portfolio power purchase.

• (+) Five Below ($FIVE) +21% because a tariff pause could boost the company’s margins.

• (–) EchoStar ($SATS) -17% after reports of an FCC investigation; TD Cowen lowered its price target.

Private Dealmaking

• TSG Consumer bought Eos Fitness for $1.5 billion

• Perplexity, an AI startup, raised $500 million

• Rippling, an HR software provider, raised $450 million

• Classiq, a quantum software company, raised $110 million

• X-Bow, a solid-rocket motors provider, raised $105 million

• Infinite Uptime, an energy efficiency software provider, raised $35 million

For more PE, VC & M&A deals, subscribe to our Buysiders newsletter.

BOOK OF THE DAY

Multipliers

We’ve all had experience with two dramatically different types of leaders.

The first type drains intelligence, energy, and capability from the people around them and always needs to be the smartest person in the room.

These are the idea killers, the energy sappers, the diminishers of talent and commitment.

On the other side of the spectrum are leaders who use their intelligence to amplify the smarts and capabilities of the people around them.

When these leaders walk into a room, light bulbs go off over people’s heads; ideas flow and problems get solved.

These are the leaders who inspire employees to stretch themselves to deliver results that surpass expectations.

These are the Multipliers. And the world needs more of them, especially now when leaders are expected to do more with less.

“This book is about two types of leaders: those who drain intelligence, energy, and capability from their teams and those who amplify it.”

DAILY VISUAL

US-China Trade

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DAILY ACUMEN

Legends Series: George Soros

George Soros didn’t just bet against currencies—he bet against certainty.

In 1992, Soros cemented his legend by shorting the British pound.

The UK government insisted it would defend its currency’s position in the European Exchange Rate Mechanism.

Soros thought otherwise. He was right.

On Black Wednesday, he pocketed $1 billion in a single day, earning the title: “The Man Who Broke the Bank of England.”

Behind the drama was a disciplined macro framework.

Soros, through his Quantum Fund, read markets like an ecosystem—currency flows, interest rates, political fragility, sentiment—and acted before the consensus caught up.

From 1970 to 2000, he averaged 30% annual returns. 

His philosophy? Reflexivity. Markets don’t just reflect reality—they shape it.

Soros wouldn’t wait for confirmation. He’d act on macro signals before they became headlines. He’d ask: which asset class is being mispriced by belief?

As the economic machine grinds through uncertainty, Soros’ lesson is simple: Have conviction.

Watch the macro trends. And don’t be afraid to bet big when the crowd clings to something broken.

ENLIGHTENMENT

Short Squeez Picks

• Why helpfulness is underrated

• How to help middle managers from burning out

• 6 ways to gain influence without formal authority

• How teens are using ChatGPT to invest in the stock market

• How to build a feedback culture

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Memes of the Day

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