# US Stocks End Near Flat as Investors Turn Cautious Ahead of Critical US-China Trade Talks
Market Update: Saturday, May 10, 2025
Wall Street closed the week with minimal movement as investors adopted a wait-and-see approach ahead of crucial trade talks between US and Chinese officials scheduled for this weekend. The cautious sentiment reflects growing uncertainty about how these negotiations might reshape global trade dynamics.
## Friday’s Market Performance
The major indexes finished Friday’s session with slight declines:
– The Dow Jones Industrial Average fell 119.07 points, or 0.29%, closing at 41,249.38
– The S&P 500 edged down 0.07% to 5,659.91
– The Nasdaq Composite finished nearly flat at 17,928.92
For the week, all three major indexes posted modest losses, with the S&P 500 down about 0.5%, the Nasdaq dropping 0.3%, and the Dow slipping 0.2%.
## All Eyes on Bessent’s China Meeting
Treasury Secretary Scott Bessent is traveling to Geneva, Switzerland, for high-stakes trade negotiations with Chinese counterparts. These talks have taken on heightened significance after President Trump suggested on his Truth Social platform that “80% Tariff on China seems right,” adding that the final decision would be “Up to Scott B.”
While this would represent a reduction from the current 145% tariff rate imposed in April, it would still maintain significant trade barriers with one of America’s largest trading partners. China has already retaliated with tariffs as high as 125% on US exports.
## What This Means for Investors
If you’re trading today, these developments warrant close attention for several reasons:
1. Market Volatility Expected : The outcome of these negotiations could trigger significant market movements when trading resumes Monday, particularly in sectors with high exposure to US-China trade.
2. Sector Implications : Companies dependent on Chinese supply chains or with significant revenue from Chinese markets may face heightened uncertainty. Conversely, domestic-focused small caps have shown resilience, with the Russell 2000 ending flat amid the broader uncertainty.
3. Economic Outlook Concerns : According to Peterson Institute for International Economics Senior Fellow Mary Lovely, who commented on Bloomberg, sustained high tariffs could impact inflation, supply chains, and overall economic growth projections.
4. Value vs. Growth Dynamic : Value stocks outperformed growth counterparts this week, potentially signaling a defensive positioning by investors ahead of trade policy developments.
The market’s muted reaction so far suggests investors are waiting for concrete outcomes rather than reacting to rhetoric. However, this cautious approach could quickly change depending on the tone and substance of this weekend’s discussions.
## Other Market Factors to Watch
Beyond the US-China trade situation, Treasury Secretary Bessent has warned that debt limit measures could run out by August, adding another layer of uncertainty to the market outlook.
For traders navigating these complex dynamics, maintaining diversification while closely monitoring developments in Geneva this weekend will be crucial. Monday’s opening bell may well set the tone for the coming weeks as markets digest the implications of these high-stakes negotiations.
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