Major stock indices were up today on continued U.S. trade talks with China, after Google dragged Nasdaq down with it.
Positive sentiment prevailed in the broader markets, though the tech sector saw some turbulence. On Wednesday, May 7, the Dow Jones rose 377 points, or 0.92%, while the S&P 500 gained 0.42%. The Nasdaq, however, hovered just above the opening level, up 0.07%, after briefly diving 200 points earlier in the day.
The tech-heavy index fell sharply from a high of 17,793 to a low of 17,600 in under an hour, largely due to pressure on major tech stocks. Notably, Google was one of the biggest losers, dropping 8.11% following reports that Apple plans to shift its Safari browser’s focus to AI-powered engines.
Google depends heavily on its search business for revenue, and investors fear that Apple’s pivot could threaten that stream. Apple’s stock was also down 1.46%. Importantly, Google currently pays Apple $20 billion annually to remain the default search engine on Apple devices.
Renewed trade talks boost markets
Despite tech stocks tumbling, markets were up on news of renewed trade talks between the U.S. and China. Notably, reports surfaced that U.S. officials were meeting with Chinese representatives to resolve the tariff crisis.
Talks are set to take place this week on the unprecedented 145% U.S. tariff rate on all Chinese goods, and the retaliatory 125% Chinese tariffs. While these talks are encouraging, it is likely that negotiations are going to last at least several months.
In the meantime, tariffs are causing noticeable damage to both the U.S. and the Chinese economy. Chinese factory activity was down significantly in April, while the U.S. Federal Reserve anticipates a slowdown in growth.
In light of trade uncertainty, crypto markets have shown continued resilience. Bitcoin (BTC) is up 1.88% to $96,586, while the overall crypto market cap rose 1.54%, edging closer to regaining the $3 trillion mark.
