Stocks Rise on U.S.-China Tariff Deal Amid Sector Moves

European markets gain as U.S. and China suspend tariffs for 90 days. Stocks, especially in semiconductors, react positively, while healthcare shares decline ahead of pricing policy changes.

Date: 12-05-2025

AI Rating: 7

Market Response to Tariff Suspension
The recent announcement of a temporary suspension of tariffs between the U.S. and China is expected to bolster market sentiments significantly. U.S. tariffs on Chinese goods will drop from 145% to 30%, while Chinese duties on U.S. imports will decrease from 125% to 10%. This change suggests a potential for improved trade dynamics, benefitting many sectors, particularly technology and semiconductors.

Sector Analysis
Semiconductors have been particularly responsive to tariff news, as the reduction in costs associated with trade can enhance profit margins and operational efficiency for companies in this sector. For instance, stocks like ASML Holding and Infineon Technologies experienced notable gains (5% and 6%, respectively), demonstrating strong investor confidence in their ability to capitalize on improved trade relations.

Company Performances
Moreover, UniCredit's 3% increase in share price post-announcement reflects a strong quarterly performance that defies market expectations, as they raised guidance for 2025 following an unexpected profit surge. Conversely, German steelmaker Salzgitter AG's decline of 4% emphasizes that not all sectors are benefiting; this firm reported weak pricing leading to a quarterly loss, underscoring how industry-specific challenges can counterbalance broader market trends.

Healthcare Sector Concerns
The healthcare sector is exhibiting weakness ahead of new U.S. pharmaceutical pricing regulations, evidenced by significant drops in AstraZeneca, Hikma Pharmaceuticals, and GSK stocks. Such regulations can potentially squeeze profit margins and lead to declines in net income for these companies, highlighting how legislative changes can create investor caution.

Economic Implications
It’s also important to consider broader economic implications, such as poor recruitment activity in the U.K. that could reflect underlying issues related to wage inflation and overall economic health. This sentiment might be indicative of a market that is cautious about growth prospects moving forward.

Stocks: ASML IFNNF UCPCF GSK AZN HIK STZUY