Morning Note: Cautious Optimism on US-China Trade; AMD & Arista Reports Loom

Markets Watch U.S.-China Moves, But Doubts Persist

As financial markets place their hopes on potentially easing the U.S.-China trade war, some experts caution that meaningful progress toward a deal between the world's two largest economies may still be distant. China recently announced it is "evaluating" a U.S. proposal to resume trade talks in response to Washington’s 145% tariffs. It has also compiled a list of U.S.-made products eligible for exemption from its own 125% retaliatory tariffs. Despite these developments, tariff-related news has largely faded in importance for Chinese markets. They no longer influence market direction unless there is a clear reversal in the trade policies introduced during the Trump administration.

(S&P 500 Index Daily Chart, Source: Trading View)
From a technical analysis perspective, the S&P 500 index has been in a bearish trend since mid-February 2025. However, it rebounded from a support zone in early April 2025 with strong bullish momentum and is now exhibiting a bullish trend, as indicated by a pattern of higher highs and higher lows. Recently, the index broke above the swap zone between 5,475 and 5,535. This continued

bullish momentum suggests the potential for an upward move to retest the resistance zone between 5,770 and 5,830.

Investors Await AMD Q1 Earnings Report

Advanced Micro Devices (AMD) is expected to have posted strong performance in the first quarter of 2025, driven largely by robust Data Centre revenues. The company is set to report its Q1 results today after the U.S. market closes. A key contributor to this anticipated strength is AMD’s expanding presence in the enterprise data centre market, supported by the growing adoption of its fourth-generation EPYC CPUs. First-quarter Data Centre revenue is estimated at $3.4 billion, reflecting a substantial year-over-year increase of 47.5%.

Moreover, AMD continues to benefit from a diversified product portfolio and a broadening partner ecosystem. These factors have played a crucial role in boosting revenue within the client segment. The company is also likely to experience ongoing growth in its client business, fuelled by rising demand for AMD Ryzen processors across both desktop and mobile platforms.

(AMD Share Price Daily Chart, Source: Trading View)
From a technical analysis perspective, AMD's share price has been trending downward, as indicated by a series of lower highs and lower lows within a descending channel. Recently, it broke above the swap zone between 93.50 and 96.50. This short-term bullish momentum may push the price upward to retest the resistance zone of 113 to 116.

Arista's Q1 Report in Focus: Can Momentum Continue?

Arista Networks, Inc. (ANET) is scheduled to report its first-quarter 2025 earnings today after the U.S. market closes. The estimate projects revenues of $1.96 billion and earnings of 59 cents per share. The company has consistently outperformed expectations, delivering an average earnings surprise of 12.9% over the past four quarters, including a 14% beat in the most recent quarter. Moreover, Arista maintains a strong leadership position in the high-speed data centre market, particularly in 100-

gigabit Ethernet switching. It continues to gain momentum in the 200- and 400-gigabit high-performance switching segments as well.

(Arista Share Price Daily Chart, Source: Trading View)
From a technical analysis perspective, Arista's share price has been in a bearish trend since the end of January 2025. However, it rebounded from the support zone between 58.00 and 61.00 in early April and is currently moving in a bullish trend, as indicated by a pattern of higher highs and higher lows. Additionally, it broke above the order block between 85.00 and 88.00 recently. This suggests the upward momentum may continue, with a potential retest of the resistance zone between 104.00 and 107.00.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.