Hey everyone, Hedgie here! Welcome to this week's market breakdown. I'm going to walk you through everything that happened in the markets this week and explain what it means for regular investors like you. This was a week of cautious optimism as the White House announced a trade deal with China, though details remain sparse, and markets processed mixed economic signals.

All three major indices finished the week slightly lower, with the S&P 500 down 0.5%, the Dow down 0.2%, and the Nasdaq down 0.3%. This modest pullback comes after the impressive recovery rally we've seen over the past few weeks, with the S&P 500 having recouped all of its tariff-related losses from early April. As of Sunday evening when this newsletter was prepared, stock futures were pointing to a positive open on Monday (S&P 500 futures +0.7%, Nasdaq futures +0.8%, Dow futures +0.6%) as traders react to the weekend's US-China trade deal announcement.

Note: This newsletter was prepared on Sunday evening for Monday morning release. Market conditions may have changed by the time you're reading this.

The S&P 500 has recovered impressively from the April tariff announcement, now trading between the 50-day and 200-day moving averages. This chart shows how the market has recouped its losses despite ongoing trade uncertainties.

TRADE BREAKTHROUGH AND ECONOMIC SIGNALS: WHAT HAPPENED THIS WEEK

This week brought several significant developments that could shape market dynamics in the weeks ahead:

US-China Trade Deal Announced, Details Pending

The biggest news came Sunday evening when the White House announced a "trade deal" with China following weekend negotiations in Geneva. Treasury Secretary Scott Bessent described the talks as "productive" and promised more details in a Monday morning briefing. US Trade Representative Jamieson Greer called the discussions "very constructive" and noted that the quick agreement suggests "the differences were not so large as maybe thought."

While specifics remain unclear, Chinese Vice Premier He Lifeng said the meeting "achieved substantial progress and reached important consensus," including establishing a consultation mechanism for trade and economic issues. This development follows President Trump's Saturday social media post suggesting an 80% tariff on China "seems right," which many interpreted as a negotiating tactic ahead of the talks.