CNBC Business News Update - Market Midday: Stocks Rally On US-China Trade Talks, Trump Signs Drug Price Reduction order, Thunderbolts Wins Box Office 5/12/25

Episode Date: May 12, 2025

From 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. Anchored by CNBC's Jessica Ettinger.

I'm Jessica Edinger CNBC Wall Street in the green this afternoon a trade inspired rally after US China trade talks over the weekend the Dow up 888 points it's off its earlier highs it had been up more than a thousand it's up 2% being led higher by shares of Amazon up 7% this afternoon the S&P 500 index up 144 points, that's 2.5%, and the Nasdaq soaring 633 points, 3.5%. President Trump signing an executive order to cut prices on some drugs to match the price for the drug overseas. Shares of some drug makers are lower in afternoon trading. President Trump speaking about trade talks with China in Switzerland over the weekend.

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. Going to be great for everybody. Reciprocal tariffs between both countries slashed for 90 days from 125 percent down to 10. The current 20% duties on Chinese imports relating to fentanyl, those are going to stay. So total tariffs right now on Chinese-made goods coming in sit at 30%. Very agreeable meeting here. We got a lot done over two days.

So I would imagine that in the next few weeks we will be meeting again to get rolling on a more fulsome agreement. Treasury Secretary Scott Besant on CNBC from Geneva, Switzerland. Here's former U.S. Senator Heidi Heitkamp on CNBC. Let's not kid ourselves. This is a good first step. This didn't need to happen. Is an unforced error. We didn't need to take this step. I think if you had such a good relationship, he could have done this without threatening the livelihood of a lot of American small businesses. We'll see what the deal looks like when it's done.

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. I do think it necessary. I think Heidi's absolutely right, though. 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 UK deal I think is still just a term sheet. So we're several months away there So I count this as Heidi mentioned progress in the right direction

But certainly far from final success one economist tells CNBC that business decisions are likely just on hold right now Economic activity over the next 90 days will be higher than it would have been otherwise. If only because people want to exploit a short-term window. My own gut feeling is we will get some slowing in the economy. We will get some higher inflation. I don't think we're going to get any spike

in unemployment. I think CEOs are just waiting. They don't want to take any major decisions that has longer-term consequences. If you lay someone off and it's wrong, you've got to find someone else, retrain them. So any decisions that have longer term implications, people will wait for now. Allianz, economic adviser, Mohammed Al-Aryan on CNBC. Apple reportedly considering another price increase for its iPhones this fall, not saying this would be linked to tariffs,

but most of its iPhones are made in China. Disney's Thunderbolts won the weekend box office for the second week in a row, and Warner Brothers, a Minecraft movie, has now passed Spider-Man and ticket sales heading toward a billion dollars globally. Jessica Edinger, CNBC. CNBC Plus, the new streaming platform from the number one source in business news. Start streaming. Go to CNBC.com slash plus now.