CNBC Business News Update - Market Close: Stocks Rally, Dow Up 1,160 Points, Drug Price Cut Executive Order 5/12/25
Episode Date: May 12, 2025From Wall Street to Main Street, the latest on the markets and what it means for your money. Updated regularly on weekdays, featuring CNBC expert analysis and sound from top business newsmakers. Ancho...red by CNBC's Jessica Ettinger.
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I'm Jessica Ettinger CNBC a temporary tariff cut and Wall Street opens Tuesday morning
after a strong rally for stocks.
Investors hoping that the beginning of the end of tariffs could be near.
The Dow soaring 1160 points 2.8% led higher by shares of Amazon which were up 8%.
S&P 500 index up 184 points, 3%.
It's 5% away from its all-time high.
The Nasdaq up 779 points.
That was 4.3%.
Markets are still lower year to date.
President Trump saying talks with China in Switzerland were successful.
To me, the biggest thing that came out of that meeting is they've agreed now we have
to get it papered, but they've agreed to open up
China. Gonna be great for everybody. And Treasury Secretary Scott Besant says he
hopes to continue talking with China on trade. I would imagine that in the next
few weeks we will be meeting again to get rolling on a more fulsome agreement.
Critics say nothing really happened except for the U.S. temporarily lowered its tariffs on China
from 125% to 30%.
And consumers will still see large price increases
for items depending on which sellers
choose to absorb the costs.
I think we can get through the 90 days
and announce some sort of deal.
The deal will be largely empty
and then it will progressively fall apart.
There is this question of why did we do all this when we were just going to undo it six
weeks later.
So, a loss for President Trump and his credibility.
AEI Asia economist Derek Scissors on CNBC and the former head of the Office of Budget
and Management in the Trump administration, Mick Mulvaney, said this on CNBC.
Were tariffs there for the purposes of rebuilding the manufacturing base in the U.S.?
Are we going to be making textiles and shoes in this country again?
Or were tariffs there for the purpose of leverage for negotiating deals?
And I think now we pretty much know what the answer to that question is.
This is leverage.
Donald Trump is one of the best I've ever seen at making leverage out of nothing.
We are nowhere near having a deal.
I think when we cut a deal with the Chinese back in 2018, it took us 18 months.
The U.K. deal, I think, is still just a term sheet, so we're several months away there.
So I count this as progress in the right direction, but certainly far from final success.
Retailers sensitive to tariffs on Chinese imports jumped Monday.
Names like Five Below, Nike, Estee Lauder, Amazon, and some caution for investors from
CNBC's Brian Sullivan and fun strats, Tom Lee.
We're just one tweet or true social post or headline away from maybe another market collapse.
Isn't it important for your clients and our viewers and listeners to always accept that reality?
If the president says, well, China's not negotiating in good faith and we're walking away,
I mean, there's a thousand point drop.
Yeah, that's possible.
President Trump signing an executive order
to cut prices on some drugs
to match the price for the same drug overseas.
Shares of pharmacy chain CVS Health tumbled
because part of the order calls for a platform
to let Americans buy those products
directly from the drug companies.
Just days after student loan payments started up again,
the Trump administration is moving to garnish the wages
of defaulted student loan borrowers.
The Department of Education can garnish up to 15%
of after-tax pay, and by law, they have to leave borrowers
with at least 30 times the federal minimum hourly wage
each week, that turns out to $217.
Notices will go out this summer to those targeted for wage garnishment. hourly wage each week that turns out to $217.
Notices will go out this summer to those targeted for wage garnishment.
On Tuesday's watch list, we get the latest on inflation with the CPI, the Consumer Price Index for April.
Jessica Edinger, CNBC.