Markets Remain Volatile as China and U.S. Annnouce Tariff Talks; Disney Rockets Higher; Jim Cramer, John Maynard Keynes Advise Standing Still

Market volatility - in both directions - continues to be the major theme of the markets this season. Earnings have been a mixed bag, with some companies thriving - like Microsoft and Meta Platforms - and others just surviving - Amazon and Apple.

Because of tariff trauma, an unhealthy number of companies have either slashed forward guidance or withdrawn it altogether, notably, airlines, JetBlue, American, United, just to name a few. Because of the on/off daily differences of opinions, rumors, and statements, company managers have no way to predict much more than which way the wind might be blowing on any given day, much less three, six or 12 months from now.

There's even more to consider. Warren Buffett steps down. The pope dies. India and Pakistan are exchanging fire. Ukraine is still largely unsettled.

What's a trader or investor to do?

For passive investors like the bulk of workers who are enrolled in long-term pension, IRA, or 401k plans, there's little choice but to hold the line and either retreat to defensive stocks or move funds into fixed income or money markets.

Active traders, especially hedge funds and portfolio managers of the big firms like Goldman Sachs, Morgan Stanley, Schwab, Merrill Lynch, et. al., are trying their level best to get a grip on the situation, even though it changes day-to-day.

Perhaps the best advice comes from CNBC's Jim Cramer, not exactly a beacon of logic or prudence, who often advises investors of all stripes to do nothing during earnings season, which is thankfully beginning to wind down. Had one taken such a blod, sage step to stand back, the results may turn out to be of a positive nature. Stocks - of course, depending upon specific allocations - have clawed back all of the losses stemming from the April 2nd "Liberation Day" tariff announcement, and are looking to add to gains at this juncture.

After markets closed on Tuesday, the White House, via Treasury Secretary Bessent, announced that China and the United States would be meeting in Switzerland later this month, the first indication that the two warring sides of the trade imbroglio, are approaching readiness to hammer out some kind of compromise rather than tear each others' economies apart with tariffs of 125-145% on all manner of goods.

At the same time, Advanced Micro Devices (AMD) reported an earnings beat sending shares higher in the after-and-pre market.

Supermicro (SMCI) reported with weak guidance, sending share lower by six percent. Rivian (RIVN) lost money again, posting -0.48, which was actually a beat, but the stock is caught in a downdraft, and Wynn Resorts (WYNN) reported EPS of $1.07, a miss, but the stock is up three percent. All three reported after Tuesday's close.

Wednesday morning offered better news as Disney reported a solid quarter with theme parks resurrected and the addition of over a million subscribers to their various streaming services. Shares are ripping higher by six to eight percent.

On the other hand, UBER reported this morning with a huge earnings beat of 0.83, but the stock is selling off by four percent before the bell, which brings to mind more sage advice, this offered by none other than John Maynard Keynes, who quipped, "The market can remain irrational longer than you can remain solvent."

There may be something to be learned from that.

At the Close, Tuesday, May 6, 2025:
Dow: 40,829.00, -389.83 (-0.95%)
NASDAQ: 17,689.66, -154.58 (-0.87%)
S&P 500: 5,606.91, -43.47 (-0.77%)
NYSE Composite: 19,182.16, -121.08 (-0.63%)