(The opinions expressed here are those of the author, a

columnist for Reuters.)

By Mike Dolan

LONDON, May 2 (Reuters) - What matters in U.S. and

global markets today

By Mike Dolan, Editor-At-Large, Financial Industry and Financial

Markets

It's Friday, so today I'll provide a quick overview of what's

happening in global markets and then offer you some weekend

reading suggestions away from the headlines.

Today's Market Minute

* Beijing is "evaluating" an offer from Washington to hold talks

over U.S. President Donald Trump's 145% tariffs, although it

warned the United States not to engage in "extortion and

coercion."

* Japan could use its $1 trillion-plus holdings of U.S.

Treasuries as a card in trade talks with Washington, raising

explicitly for the first time its leverage as a massive creditor

to the United States.

* Apple ( AAPL ) CEO Tim Cook told analysts on Thursday that tariffs

could add about $900 million in costs this quarter as the iPhone

maker shifts its vast supply chain to minimize the impact of the

trade war.

* The Trump administration ended U.S. duty-free access for

low-value shipments from China and Hong Kong on Friday, removing

the "de minimis" exemptions availed of by Shein, Temu and other

e-commerce firms as well as traffickers of fentanyl and other

illicit goods.

* A Reuters review of almost 100 Chinese and Hong Kong companies

added to the U.S. entity list in 2023 and 2024 found more than a

quarter contained erroneous details, such as incorrect names and

addresses and outdated information.

Buy in May?

The U.S. stock rebound has gathered steam as the new month

gets underway, confounding the old 'sell in May' adage, largely

due to trade war de-escalation hopes and some selective tech

optimism.

April's employment report on Friday will tell us a lot about

the durability of this rally, as last month's jobs market

picture remained mixed. A big jump in jobless claims last week

was put down to seasonal quirks related to a late Easter.

Meanwhile, the broader economic picture continues to be less

a cause for cheer than a case of "it could have been worse".

ISM's manufacturing survey on Thursday showed an ongoing

contraction in factory activity in April, but by slightly less

than feared.

Signs of some rowback in the extreme U.S.-China trade

standoff could be more of a boost, coming as they do alongside

the week's impressive Microsoft and Meta earnings beats.

That said, the fortunes of Big Tech megacaps may be

diverging. Apple ( AAPL ) disappointed the Street overnight

after it noted the high costs associated with shifting its

supply chains, and its stock was down about 4% ahead of Friday's

bell. And Amazon ( AMZN ) shares were also down 2% as its cloud

business and income guidance fell short of expectations.

Pharma stocks were also hit on Thursday. Even though Eli

Lilly ( LLY ) results topped expectations, its shares tumbled

12% after CVS Health said it was dropping Lilly's obesity drug

Zepbound from some lists of medicines covered for reimbursement.

And yet the more positive mood music around the trade war

seems to have encouraged the broader market nonetheless.

Beijing is "evaluating" an offer from Washington to hold

talks over President Donald Trump's steep tariffs, China's

Commerce Ministry said on Friday, signalling a potential

breakthrough in the severe faceoff.

The pressure to talk has been building as the Trump

administration ended U.S. duty-free access for low-value

shipments from China and Hong Kong, removing "de minimis"

exemptions.

Taking it all in, however, S&P 500 futures were up

another 0.5% ahead of Friday's open, adding to yesterday's cash

market gains. Futures on the small cap Russell 2000 were

up 1%.

All of which means the main Wall Street indexes

have recovered most or all of the losses seen

since the April 2 tariff sweep, even though they remain deeply

negative for the year.

Given the unusually negative start for the year, many

strategists wonder if seasonal trends captured in the "sell in

May and go away" quip will hold this year. And most reckon the

huge macro uncertainties mean it's equally impossible to apply

it in reverse.

Flipping back to Friday's diary, the payrolls report will

dominate early on, with consensus set for a drop in job growth

last month to 130,000. 'Big Oil' dominates the earnings slate.

With next week's Federal Reserve meeting set to leave

interest rates on hold for now, Treasury yields backed-up

sharply on Thursday on a combination of relief at the ISM survey

results and the stock market rally.

The Trump administration was not short of advice for the

Fed.

Renewing his attack on Fed Chair Jerome Powell as "a guy in

the Fed that I'm not a huge fan of", Trump said: "He should

reduce interest rates. I think I understand interest a lot

better than him, because I've had to really use interest rates."

Treasury Secretary Scott Bessent also said the Fed should

cut.

"We are seeing that two-year rates are now below fed funds

rates, so that's a market signal that they think the Fed should

be cutting," he said.

Maybe even more alarming for the bond market, Japan finance

minister Katsunobu Kato said the country could use its $1

trillion-plus holdings of U.S. Treasuries as a card in trade

talks with Washington, raising explicitly for the first time its

leverage as a massive creditor to the United States.

The dollar fell back across the board, as the yen

recouped some of its losses and China's offshore yuan

hit its highest since March.

Elsewhere, Britain's FTSE 100 is heading for its

15th straight consecutive daily gain, which would be the longest

winning streak since the index was first compiled in 1984.

Weekend reading suggestions

Here are some articles away from the day-to-day headlines

that you may find interesting.

1. TRADE DEFENSE: In a videoed conversation this week with

Council on Foreign Relations President Michael Froman, Donald

Trump's first term Trade Representative Robert Lighthizer shared

his take on the current administration's trade agenda, sketching

out the rationale for these policies.

2. TARIFF ILLUSION?: In an article published on CEPR's VoxEU

site, geopolitics and economics professors Simon Evenett and

Marc-Andreas Muendler examine the extent to which U.S. import

tariffs could fund the government.

3. PARADISE LOST: Pacific archipelago Palau, the site of some

brutal World War Two clashes, is once again on the frontline.

Reuters correspondents Pete McKenzie and Hollie Adams show how

China and the United States and its allies are preparing forces

in an intensifying contest for control over the Asia-Pacific

region.

4. TAX WEDGES: The annual OECD report on take-home pay shows

that as inflation fell last year, the average worker's post-tax

income rose in real terms in almost three quarters of the 38

countries surveyed after two years of declines for a majority of

them.

5. ENDURING TAILWINDS: In an article for Project Syndicate,

economist and professor Nouriel Roubini - once known as "Dr

Doom" - takes a positive long-term view of the U.S. economy amid

a blistering critique of the current administration. He argues

that American private sector leadership in tech and other

sectors will see it resume its 'exceptional' performance over

the coming decade despite this year's policy shocks.

6. AI AND MINERALS: Reuters correspondent Ernest Scheyder shows

how control of a U.S. government-created artificial intelligence

program that aims to predict the supply and price of critical

minerals has been transferred to a non-profit organization,

helping miners and manufacturers strike supply deals.

7. RE-ARM, RE-GREEN: As Europe juggles defence and climate

priorities, Bruegel Senior Fellow Simone Tagliapietra outlines

seven converging interests between both agendas.

8. TRIPLE HEDGING: In another Project Syndicate article,

economist and author Dambisa Moyo discusses how investors hedge

against "worse case" scenarios of economic, financial and

rule-of-law breakdowns, with the last of the three likely to

require holding real, physical, portable assets.

9. RIGHT OFF: Reuters correspondents Anita Komuves, Andrew R.C.

Marshall and Krisztina Than explain how U.S. tariffs have

undermined hopes among Europe's far right leaders that Trump's

presidency would usher in a golden era for them.

Chart of the day

It was a rollercoaster April for the so-called "Magnificent

Seven" U.S. big tech megacap stocks - Microsoft, Apple ( AAPL ),

Alphabet, Amazon ( AMZN ), Nvidia, Meta and Tesla. Exchange-traded funds

invested in the group plunged as much as 13% after April 2's

tariff sweep only to regain all that ground by May 1.

First-quarter earnings from three of the seven were greeted

favorably by investors in the past week, though Apple ( AAPL ) and Amazon ( AMZN )

were snubbed again overnight. Despite the wild swings, the Mag 7

remain down 12% for the year so far. Excluding these huge

stocks, the rest of S&P 500 is effectively back to where it

started 2025.

Today's events to watch

* US April employment report (8:30EDT), March factory orders

(10:00EDT)

* U.S. corporate earnings: Exxon, Chevron, Dupont De

Nemours, Franklin Resources, T Rowe Price, Cigna, Apollo, Cboe

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.