A Strong Surge Across US Equities
On Monday, US stock markets recorded their largest one-day rise in over a month following the announcement of a 90-day suspension in tariffs between the United States and China. This development fueled a surge across major indices, with the Nasdaq, S&P 500, and Dow Jones Industrial Average all posting significant gains. The optimism was underpinned by hopes that the tariff suspension could signal a broader de-escalation in trade tensions between the world’s two largest economies.
Leading the rally were technology and consumer discretionary stocks, with Amazon, Meta, and Tesla each seeing notable gains. Investors welcomed the news as a potential step toward stabilizing global economic growth, alleviating recession concerns, and lifting sentiment in sectors that are particularly sensitive to trade policy developments.
Investor Sentiment Remains Guarded Ahead of Key Data
Despite the impressive market rally on Monday, caution remains a dominant theme among investors. Focus is now shifting to upcoming US economic data, particularly inflation and retail sales figures, which are expected to play a critical role in shaping expectations for future monetary policy decisions. These data points will be closely scrutinized to determine whether the Federal Reserve might reconsider its stance on interest rate adjustments.
In the bond market, Treasury yields moved higher as traders reassessed the likelihood of rate cuts in light of the tariff-related developments. At the same time, gains in US equities were echoed across global markets, with European and Asian indices also closing higher, supported by optimism over the progress in US-China trade talks.
Commodities and Currencies React to Tariff Developments
Oil prices crossed above the $60 mark for the first time in several weeks, buoyed by expectations of stronger demand in the wake of easing trade tensions. However, on Tuesday, prices edged slightly lower as investors turned their attention to the upcoming US inflation data and assessed the sustainability of global demand recovery. In currency markets, sentiment remained risk-on, with the US dollar strengthening and the euro weakening. These moves reflect growing anticipation around the release of the latest US Consumer Price Index figures.
Highlights from Global Market Updates
Asian Markets Mixed Amid Domestic Concerns
Asian equities mostly traded in positive territory, although Chinese markets underperformed due to investor caution and profit-taking amid uncertainty about future domestic stimulus. In India, the stock market took a breather following strong recent gains, which had been supported by easing geopolitical tensions with Pakistan. Market participants in the region are awaiting fresh inflation data to provide direction.
European Indices Close Higher
European markets mirrored the upbeat sentiment from Wall Street. The DAX rose by 0.3%, the CAC 40 gained 1.4%, and the FTSE 100 advanced by 0.6%. Optimism surrounding the progress in US-China trade negotiations contributed to broad-based gains across European sectors, helping lift investor confidence.
US Futures Dip Ahead of CPI Data
US equity futures moved slightly lower during overnight trading as investors braced for the release of Consumer Price Index data and other key economic reports scheduled for the week. Despite the strong performance on Monday, market participants remained cautious as they awaited new indicators to gauge the strength and direction of the US economy.
Company News – Movers and Shakers
Apple & Samsung Intensify Tech Battle
Apple is reportedly developing an AI-powered battery management feature for its upcoming iOS 19, aimed at optimizing iPhone battery life. At the same time, the company is considering price increases for its next iPhone lineup, potentially in response to rising costs associated with new features and a more streamlined, ultrathin design. Analysts have raised concerns that higher prices could lead to a loss of market share, especially as competition intensifies from Samsung. In a strategic move, Samsung unveiled its slimmest flagship model to date, the Galaxy S25 Edge, which features a 5.8mm body and advanced AI capabilities.
Strong Earnings and Strategic Moves
UniCredit has raised its 2025 profit outlook following a stronger-than-expected quarterly performance driven by growth in fees and trading income. Despite the upbeat results, the bank is maintaining a cautious approach toward mergers and acquisitions. CEO Andrea Orcel emphasized that any future deals would need to support the bank’s standalone strategy, particularly in light of uncertainties surrounding potential acquisitions of Banco BPM and Commerzbank, both of which face governmental resistance in Italy and Germany.
Grifols reported a 7.4% year-over-year increase in revenue, reaching €1.79 billion, with group profit rising 179% to €60 million. The strong results were fueled by continued demand for immunoglobulin. The company also reaffirmed its 2025 outlook and announced plans to launch its fibrinogen therapy in Europe later this year and in the United States by mid-2026.
Coinbase shares jumped more than 10% in after-hours trading after the announcement that the cryptocurrency exchange would be added to the S&P 500, replacing Discover Financial Services on May 19. The inclusion came despite a drop in first-quarter profits and a miss on earnings expectations, highlighting Coinbase’s growing relevance in the financial sector.
FedEx also saw its shares rise following news of a renewed partnership with Amazon. The deal marks a turnaround from their split in 2019 and is expected to help Amazon address delivery bottlenecks left by UPS, while offering FedEx a strategic opportunity to reengage in ecommerce logistics. Details of the agreement remain limited for now.
Analyst Actions and Sector Insights
Citi upgraded PDD Holdings to a Buy rating with a price target of $165, citing the positive effects of reduced US tariffs on its Temu platform. Analysts noted that manageable tariff costs, combined with cost efficiencies and pricing power, should support improved profit margins in the second quarter of 2025. However, risks remain, including the potential delisting of American Depositary Receipts and limited transparency.
Goldman Sachs upgraded Anheuser-Busch InBev to Buy from Neutral and raised its price target to €78. The bank pointed to strong debt reduction, margin expansion, and growth in markets outside the US as key drivers for the upgrade, while also noting possible headwinds from slow progress in deleveraging and weak demand trends in China.
Morgan Stanley issued a downgrade for BP to Underweight, citing a more bearish oil price outlook and increased balance sheet risks. Conversely, TotalEnergies was upgraded to Overweight, with analysts praising its defensive positioning and consistent strategic execution. The firm now expects Brent crude prices to fall to $55 per barrel by 2026, signaling downside risks to earnings, buybacks, and overall equity performance for the sector.
RBC Capital Markets initiated coverage of Hermès with an Outperform rating and a price target of €2,600. The firm cited Hermès’ robust financial profile, including consistent annual revenue and EBIT growth of around 10%. The company’s supply-constrained model, deep vertical integration, and pricing power continue to support its premium valuation and steady expansion.
Setbacks for Xiaomi’s EV Launch
Xiaomi faced headwinds in its electric vehicle business as customer backlash mounted over claims that the SU7 Ultra EV’s carbon fibre hood was misrepresented in marketing materials. This development, coupled with earlier criticism regarding driving modes and a recent fatal crash, has placed the company’s EV strategy under scrutiny. Nevertheless, Xiaomi is sticking to its goal of achieving 350,000 EV sales by 2025.
Upcoming Key Data and Market Events
Investors are closely watching the release of US CPI and Core CPI data today for updated insights on inflation trends. Also in focus is the API Weekly Crude Stock report, which will offer additional clarity on oil demand, as well as quarterly earnings announcements from major firms including Munich Re and Bayer AG.
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