Breakfast | The UK and US officially announce a trade agreement, Trump calls for "buy stocks"! Tech stocks and quantum computing stocks surge

Market Overview

Trade agreement breakthrough, Trump calls to "buy," U.S. stocks rise for two consecutive days, with the three major U.S. stock indices increasing for two straight days.

The favorable trade agreement led to Alcoa rising over 5%, U.S. Steel up over 2%, and Boeing up over 3%; Mattel once fell over 5%; AppLovin, with positive earnings reports, rose nearly 12%, while Arm, with disappointing guidance, fell over 6%.

The seven tech giants performed excellently, with Alphabet A up 1.94%, Amazon up 1.79%, Microsoft up 1.11%, Apple up 0.63%, and NVIDIA and Meta Platforms closing up 0.26% and 0.2%, respectively.

D-Wave Quantum surged 51.23% at closing, marking its best single-day performance since May 2023.

Coinbase's first-quarter report was disappointing, with its stock price falling over 3% in after-hours trading.

Pinterest's second-quarter revenue guidance exceeded market expectations, rising over 17% at one point in after-hours trading.

The UK and the US Reach Agreement on Tariff Trade Agreement Terms, but Details Are Yet to Be Finalized

• According to CCTV, the U.S. retains a 10% baseline tariff, with tariffs on cars imported from the UK dropping from 27.5% to 10%, and tariffs on steel and aluminum decreasing from 25% to zero. The 10% tariff discount will apply to 100,000 British cars, nearly covering the total quantity exported from the UK to the U.S. last year. Both sides also reached a new reciprocal access agreement for the beef market, with British farmers receiving a 13,000-ton duty-free quota, while the UK emphasized that standards for imported food will not be relaxed. Additionally, the UK will reduce tariffs on ethanol from the U.S. used for beer production to zero.
• According to Xinhua News Agency, Trump stated that the final details of the agreement will be finalized in the coming weeks. The White House emphasized that the previously imposed 10% so-called "reciprocal tariff" on trade partners will remain. Trump told the media that the UK's 10% tariff is not a template for other countries, and this may be the lowest tariff, with other countries potentially having higher rates.

The EU Will File a Lawsuit Against U.S. Tariffs at the WTO and Prepare Countermeasures Against €95 Billion Worth of Imports from the U.S.

• According to Xinhua News Agency, the European Commission launched a public consultation on the list of goods for countermeasures against U.S. tariffs on the 8th, involving products worth €95 billion imported from the U.S., mainly covering industrial and agricultural products. The EU pointed out that if negotiations with the U.S. do not yield mutually beneficial results and do not lead to the cancellation of tariffs, the EU may take countermeasures against these U.S. imported goods.
• At the same time, regarding the U.S. "reciprocal tariffs" and tariffs on complete vehicles and parts, the EU will file a lawsuit with the World Trade Organization (WTO).

Trump Calls to "Buy Stocks," Says He Doesn't Want to Bomb Iran, and Criticizes Powell Again

• When announcing the trade agreement between the U.S. and the UK, Trump said, "It's best to go out and buy stocks now." U.S. stocks rose during the day, with the three major indices increasing by at least over 1%, and the Nasdaq once rising by 2%.
• Trump stated that he would establish an aluminum and steel trade alliance with the UK, with Alcoa once rising over 6%. Trump mentioned that the UK agreed to purchase $10 billion worth of Boeing aircraft, with Boeing once rising by 5%. Trump warned that if Mattel relocates out of the U.S., it would face a 100% tariff on its toys, leading to Mattel falling over 5% at one point
• Trump criticizes Powell for slow actions again, stating that all central banks have cut interest rates, with the Federal Reserve being the exception. U.S. Vice President Vance also criticizes Powell for his slow actions, claiming he has made mistakes in almost everything. The previous day, Powell acknowledged that inflation and unemployment rates could worsen but insisted that the Federal Reserve must wait for more data before considering action.

Trump proposes tax increase for millionaires to balance finances, with a top rate of 39.6%

Media reports indicate that Trump's proposal includes establishing a new top tax rate of 39.6% for individuals with an annual income of at least $2.5 million or families with an annual income of over $5 million. The main purpose of this proposal is to alleviate the fiscal pressure brought about by Trump's tax cuts. It is still unclear whether the proposal will also expand tax relief for certain small business owners, who typically report income through personal tax filings.

Pakistan's stock market plunges 7%, India-Pakistan conflict escalates, multiple explosions reported

On May 8, Pakistan's KSE-100 index fell 7.1% to 102,208.40 points, while the KSE-30 index's decline widened to 8.8%, marking the largest drop since 2008. Trading on the Pakistan Stock Exchange was suspended for an hour prior.

Meanwhile, India's Nifty 50 index's decline expanded to 0.5%. India's panic index surged to 21.48, the highest level since April 9.

According to CCTV News, on May 8 local time, the Pakistan Inter-Services Public Relations reported that since India launched "Operation Red Sand," Pakistan has shot down over 25 Indian "Harop" drones.

Xinhua News Agency reported that the Pakistan Inter-Services Public Relations issued a statement on the 8th, saying that drones from India have continuously intruded into Pakistani territory, and Pakistan has shot down 25 drones. The incident has resulted in at least one civilian death and five injuries.

Bitcoin breaks through the $100,000 mark! First time since February this year

Analysts believe that recent market uncertainties have instead propelled Bitcoin's rise, as investors begin to question the dollar's safe-haven status, which may continue to support Bitcoin's trend. Although the Trump administration's tough rhetoric on tariffs has eased somewhat, the market is still waiting for a clear direction on its trade policy.

Google responds to decline in search traffic on Apple devices: Continued growth seen in total search queries

• Google paints a starkly different picture of search trends: we continue to see sustained growth in total search queries, including an increase in queries from Apple devices and platforms. More generally, as we add new features to the search engine, people find Google search more helpful for a wider range of questions—they access search in new ways and contexts through browsers or the Google app, using voice or Google Lens. We are excited about such innovations and look forward to sharing more at the Google I/O conference.
• Is this Google's "Yahoo moment"? For the first time in 20 years, search volume on Apple's browser has declined, reigniting concerns about "AI search" squeezing out "traditional search." According to Ming-Chi Kuo, Google is facing a life-or-death "Yahoo moment": Yahoo's advertising business began in 1995, while Google's advertising business started in 2000, and the former's advertising business began to decline in 2008
• Morgan Stanley: Crisis is also an opportunity, the threat of AI to search has been exaggerated, and the best time to buy the dip in Google has arrived. Morgan Stanley stated that Safari's search volume has declined for the first time, reflecting more of a shift from browsers to apps rather than a shift away from Google Search. A decline in Google's paid clicks does not equate to a loss of market share; part of the reason may be that the newly launched AI search features are improving click conversion rates. The current panic sentiment creates an excellent buying opportunity for investors, with Google’s stock price having 22% upside potential.

Apple develops dedicated chips for glasses and AI servers, project name "Baltra," expected to be ready by 2027

Apple is accelerating its layout in wearable devices and AI hardware, planning to launch its first smart glasses in 2026-2027 to challenge Meta's product line. At the same time, Apple is also developing AirPods and Apple Watch chips equipped with cameras, as well as new Mac chips and professional-grade modem chips, fully focusing on the AI and wearable device sectors.

Major leadership changes at OpenAI, appoints new application CEO, Altman relinquishes some powers

According to reports, the introduction of new application CEO Fidji Simo marks OpenAI's further improvement of its management structure, preparing for the next phase of growth and commercialization. Fidji Simo's extensive experience in e-commerce and advertising may greatly benefit OpenAI, especially against the backdrop of the company's plans to expand revenue sources.

"Quantum Computing" earnings season unfolds, IonQ "gets off to a good start"

IonQ's first-quarter revenue was $7.6 million, flat year-on-year, down 35% quarter-on-quarter, but slightly above analysts' expectations of $7.5 million; net loss was $32.3 million, narrowing from $39.6 million in the same period last year.

Management expects full-year revenue to be between $75 million and $95 million, with second-quarter revenue expected to be between $16 million and $18 million.

Coinbase's first-quarter report is disappointing, stock price drops over 3% after hours

Coinbase's total revenue for the first quarter was $2.03 billion, while analysts expected $2.11 billion; adjusted EBITDA for the first quarter was $929.9 million, while analysts expected $971.1 million; trading revenue for the first quarter was $1.3 billion, while analysts expected $1.33 billion; subscription and service revenue for the first quarter was $698 million, while analysts expected $702.5 million; subscription and service revenue for the second quarter is expected to be between $600 million and $680 million.

SMIC's Q1 net profit increased by 166.5% year-on-year, wafer sales remain robust, but Q2 outlook is cautious

SMIC's revenue for the first quarter of 2025 reached $2.247 billion (approximately 16.3 billion RMB), a quarter-on-quarter increase of 1.8% and a year-on-year increase of 29.4%; wafer sales grew by 27.7%. However, the company's Q2 outlook is cautious, expecting a quarter-on-quarter revenue decline of 4-6%.

Hong Kong Monetary Authority reduces holdings in US dollar assets

The President of the Hong Kong Monetary Authority, Eddie Yu, stated that to strengthen "defensive deployment," the proportion of dollar assets in the Hong Kong Monetary Authority's related investment portfolio has decreased from over 90% to around 79%, and the investment duration of the U.S. Treasury bonds held is also continuously shortening.

In response to tariff shocks, the Bank of England cut interest rates by 25 basis points as scheduled, but there was a three-way split in the decision-making

Five members supported a 25 basis point rate cut, two supported a 50 basis point cut, and two advocated for no change. Among the members supporting the 25 basis point cut, most believed that changes in global trade justified the rate cut, while others felt that the reasons for the rate cut were already clear