Trump Hit With Setback Ahead of China Meeting: 8 Key Items Shaping the Stock Market Friday

These are the early headlines and other items poised to influence the market at the start of the trading day. As we share this collection of market drivers, U.S. equity futures point to a positive market open later on Friday morning. We will want to check back in on those equity futures after the market receives the April Employment Report at 8:30 a.m. ET.

1. President Trump said the cease-fire with Iran is still in effect after Iran launched missiles, drones and small-boat attacks at U.S. warships transiting the Strait of Hormuz, and the U.S. responded by intercepting the threats and striking Iranian military sites responsible for the attacks. U.S. Central Command on Thursday called Iran’s attacks “unprovoked” and said that it “does not seek escalation” but remains positioned and ready to protect American forces. Trump described the latest round of strikes as a “trifle.” (WSJ)

We find Trump calling the strikes a “trifle” or in other reports “just a love tap” very interesting and a potential signal he is more inclined to end the war, open the Strait of Hormuz and get energy on the path to lower prices. Negotiating issues remain between the U.S. and Iran, including the topic of uranium enrichment, and the longer the time frame to an eventual resolution, the longer the economy feels the follow through from the war, and the greater the potential, in our opinion, Trump seeks to regain control of the narrative and peace talks.

2. President Donald Trump’s 10% global tariffs were declared unlawful by a federal trade court in a fresh blow to the administration’s economic agenda, just months after the U.S. Supreme Court vacated earlier levies he’d imposed… The Trump administration is already working on its next tariff plan, but those levies are months away from being implemented. The U.S. is investigating dozens of economies for forced labor practices and excess manufacturing capacity under Section 301 of the Trade Act, a process that is expected to eventually result in new duties. In the meantime, the White House was counting on the Section 122 tariffs to bridge the gap until July, around when some of the trade probes would conclude. The timing puts Trump at a potential disadvantage heading into a summit next week with Chinese President Xi Jinping. (Bloomberg)

We see this as the latest setback for the president, who has made the use of tariffs an integral part of his administration’s policy efforts. This ruling along with the so-far elusive peace deal with Iran could limit Trump’s negotiating power when he is expected to meet with Xi on May 14 and 15. Keeping in mind some of his time tested strategies captured in his "The Art of the Deal," we could see Trump do something unexpected ahead of those trade talks, something an overbought S&P 500 and Nasdaq Composite may not be prepared for. Fortune may favor the bold, but managing risk is a big part of investing.

3. The Bureau of Labor Statistics is due to release the April jobs report at 8:30 a.m. Eastern time (on Friday). Here is what economists tracked by FactSet are expecting:

Payrolls: +65,000, lower than March's gain of 178,000.

Unemployment rate: 4.3%, the same as in March. (Barron’s)

While ISM’s April PMI reports pointed to employment contraction, ADP’s April Employment Change Report found the largest increase in private sector jobs, 105,000, since January 2025. Even so, that magnitude of job creation still reflects what the Fed is calling a “low-hire, low-fire” labor market.

At the same time, the monthly Employment Report has been all over the place swinging from job gains to job losses over the last few months. This will make the revised data found in Friday's report more than just “passing interest.”

We also have five Fed speakers making the rounds on Friday, and how they balance their comments on renewed inflation pressures versus the latest jobs data will be something Fed watchers zero in on. Based on the inflation data of late and the pressure building in the system, our thinking is the Fed would need to see a string of horrible Employment Reports to justify cutting rate sooner than the market expects.

4. Anthropic is weighing raising tens of billions of dollars this summer to fund a vast expansion in computing capacity, in a move that would catapult it past rival OpenAI to a valuation of almost $1tn... Those people expect Anthropic’s annualised revenue, which extrapolates full-year revenue based on recent weeks, to cross $45bn imminently — a fivefold increase from $9bn at the end of last year. (FT)

That jump in Anthropic’s revenue is a big fat signal about rising AI adoption, but as we see it “a vast expansion in computing capacity” points more toward expanding AI usage in the enterprise, other institutions, and with consumers. We have to wonder how that usage will accelerate as more AI capable devices, including PCs, smartphones, tablets and other devices that are leveraging AI, like those from Axon (AXON) , or consumer appliances from Samsung, LG and others, are brought to market and put to work. Add to that more power AI models, like Anthropic’s Mythos that is currently available only to a small group of partners… you see where we’re going with this...

5. CoreWeave Inc raised the lower end ‌of its annual capital expenditure forecast on Thursday, citing a rise in the prices of components, sending the cloud infrastructure technology company's shares down more than 9% in extended trading. Demand for services from the so-called neoclouds, such as CoreWeave and Nebius, has skyrocketed as tech companies seek the hardware and cloud capacity needed for AI technologies. (Reuters)

Another set of signals that confirms AI adoption and usage, but also demand for key aspects of digital infrastructure, including chips, power, networking equipment and memory. We have more on that last one below, but before we get there, we’ll note that Cisco (CSCO) reports next week and its outlook will showcase how AI and data center demand as well as AI adoption and usage are shaping the demand for networking equipment. We see that as a potential catalyst for the Portfolio’s chip positions and others tied to digital infrastructure.

Now about memory…

6. SK Hynix is being aggressively courted by big global tech firms with offers to invest in its new production lines and fund purchases of pricey manufacturing tools as they rush to secure memory chips, people familiar with the matter said. The offers, unprecedented in the global memory chip industry, underscore ‌the severity of the component's scarcity around the world, as chipmakers struggle to keep pace with surging demand amid an artificial intelligence boom. (Reuters)

So far this year, we’ve seen supplier tie ups for power and chips, and it’s not surprising that companies are looking to do the same for memory chips. This bodes well for the Portfolio’s position not only in Micron (MU) , courtesy of the EPS Diplomats (All-Stars?) strategy, but also Applied Materials (AMAT) . AMAT reports next week on May 14.

7. Economic data today per TipRanks: Employment Report (April), University of Michigan Consumer Sentiment Index (Prelim, May), Wholesale Inventories (March).

8. Companies reporting today per TipRanks: AMC Networks (AMCX) , Construction Partners (ROAD) , Fluor (FLR) , Wendy’s (WEN) .

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At the time of publication, TheStreet Pro was long AMAT, AXON and MU.