Broad-Based Gains Across Sectors Boost U.S. Stocks
U.S. equity markets extended their winning streak on Tuesday, driven by renewed optimism surrounding U.S.-China trade discussions and widespread strength across sectors. The S&P 500 and Nasdaq each added 0.6%, while the Dow Jones Industrial Average notched a smaller gain of 0.3%. Energy and consumer discretionary stocks led the way, fueled by the perception that trade tensions may be softening.
Signs of Economic Stability
Small business sentiment rebounded in May after a four-month downturn, signaling that despite persistent policy uncertainty, business owners may be regaining confidence in the economic landscape. The recovery in optimism hints at a stabilising business climate even amid lingering uncertainty over fiscal and trade policies.
Mixed Moves in the Bond Market
Bond yields reflected a cautious optimism, with the 10-year Treasury yield dipping slightly to 4.48%, while the 2-year yield edged higher to 4.03%, hinting at mixed expectations for future Federal Reserve policy and inflation trends.
US-China Trade Progress Drives Market Confidence
Following two days of diplomatic dialogue in London, the U.S. and China agreed on a preliminary framework to implement the Geneva consensus. This includes a potential loosening of U.S. tech export restrictions in exchange for China lifting its export bans on rare earths. Though pending approval from President Trump, the agreement sparked a positive shift in sentiment across markets and helped calm recent tensions over reciprocal tariffs.
Key Inflation Data in Focus
With the Consumer Price Index (CPI) report due on Wednesday, markets remain alert. Economists forecast a 0.2% monthly increase and a 2.5% annual rise in headline inflation. Core inflation is expected to rise by 0.3% month-over-month. While some anticipate short-term pricing pressure from trade-related tariffs, the overall inflation outlook remains tame. Analysts generally view these price increases as temporary rather than the start of a sustained inflationary trend, supporting expectations for a delayed but intact rate-cutting path by the Federal Reserve.
Global Market Trends and Update
Here’s a regional breakdown of recent developments in Asian and European markets, reflecting ongoing trade negotiations and sector-specific moves.
A Look at Asia: Gains with Caution
Asian markets were mostly higher on Wednesday, led by China amid improved trade sentiment. Technology and chip stocks surged on hopes of fewer U.S. export restrictions. However, broader gains remained tempered by regional uncertainty and mixed performances across the region.
Europe Stays Flat Amid Trade Watch
European indices closed mostly unchanged as investors awaited further clarity on U.S.-China negotiations. UBS shares fell sharply due to concerns over Swiss government proposals requiring an additional $26 billion in capital. The news raised doubts about future buybacks and capital returns. Meanwhile, Novo Nordisk rallied 6% after activist hedge fund Parvus reportedly built a significant stake.
Currency and Commodity Overview
A look at FX and energy markets reveals cautious sentiment ahead of U.S. economic data and trade outcomes.
The U.S. dollar remains subdued, with the Dollar Index hovering around 99. Against the euro, the greenback is trading near its weakest levels since early 2022, with the EUR/USD pair at 1.1414, as concerns over U.S. trade and fiscal policy continue to weigh on sentiment.
Oil prices slipped after hitting a seven-week high, as traders weighed weaker global demand projections and cautious investor sentiment. U.S. crude inventories fell unexpectedly, while the EIA revised its global demand forecast lower and projected significantly reduced U.S. output next year due to declining drilling activity.
Global Growth Concerns Persist
Global economic projections continue to be downgraded amid persistent trade tensions and political uncertainty.
The World Bank revised its global GDP forecast for 2025 down to 2.3%, marking the weakest outlook in 17 years outside of recession periods. The U.S. GDP projection was cut to 1.4%. Growth expectations for the Eurozone, Japan, India, and Mexico were also lowered, while China’s projection held steady at 4.5%. Rising trade barriers and heightened policy uncertainty continue to drag on the global economic outlook.
Notable Corporate Developments
Several high-impact developments from leading global companies are shaping market sentiment this week. From breakthroughs in AI and wearable tech to upcoming earnings and stock-specific reactions, here’s what investors should know.
Tech and Innovation
Tesla plans to launch public robotaxi services in Austin on June 22, initially using 10–20 Model Y SUVs under remote human supervision. CEO Elon Musk emphasized safety and noted that the date could shift. Expansion is expected into other states, including California, despite regulatory hurdles.
Meta Platforms has agreed to acquire a 49% stake in Scale AI for $14.8 billion. Scale’s CEO, Alexandr Wang, will lead a new “superintelligence” lab within Meta. The move aims to enhance Meta’s AI competitiveness amid regulatory scrutiny. Scale AI, valued at $13.8 billion, expects revenue to exceed $2 billion this year.
Snap is preparing to release its first consumer-ready AR smart glasses, Specs, in 2026, after investing over $3 billion in augmented reality development. It will partner with Niantic Spatial to upgrade its AR Lens Studio platform.
Earnings and Ratings
Oracle and Chewy are set to report earnings later today, potentially offering key insights into consumer and enterprise spending trends.
GameStop reported a 17% decline in Q1 revenue to $732.4 million, driven by a continued shift toward digital game downloads. The company posted a net profit of $44.8 million but faced a $10.8 million operating loss, including restructuring costs. GameStop also disclosed the purchase of 4,710 bitcoins for its corporate treasury.
Slack, owned by Salesforce, has implemented new data privacy rules restricting long-term storage and searchability of messages by third-party software providers. These measures likely aim to protect customer data as Salesforce positions Slack’s data ecosystem for internal AI development.
Stock-Specific Moves
TSMC’s May sales surged 39.6% YoY to T$320.52 billion, driven by strong AI demand. Despite an 8.3% drop from April’s record revenue and export restrictions to China, international demand remained solid.
Nintendo sold over 3.5 million Switch 2 units globally within four days of its June 5 launch, covering over 20% of its 15 million unit sales target for the first year. However, shares fell more than 3% in Tokyo due to concerns over supply chain disruptions tied to tariffs.
UBS shares declined sharply as the Swiss government proposed an extra $26 billion in capital requirements. While analysts expect potential buyback cuts, UBS maintains that dividend payments are not at risk, though the rules are still under consultation.
Duolingo may face competitive pressure from Apple’s Live Translation feature, introduced at WWDC 2025. It enables real-time translation across Messages, FaceTime, and phone calls, potentially drawing users away from standalone language apps.
Renk Group was downgraded from Buy to Underperform by Bank of America due to valuation concerns, despite strong growth and a 329% YTD share price surge. Analysts noted a preference for defence stocks with stronger electronics or missile exposure.
Safran was downgraded to Neutral by Citi, which cited that the current share price already reflects its strong performance and premium positioning, despite a solid 16.7% revenue increase in Q1.
CoreWeave was again rated Underperform by DA Davidson, citing a risky financing model, high debt servicing costs, and overestimated asset values. Falling GPU prices could lower equity value to under $5 per share unless significant equity is raised.
What’s Ahead: Data and Events to Watch
Today’s market focus is on the Consumer Price Index (CPI), Core CPI, and EIA Crude Oil Inventories, all of which could sway investor sentiment and influence the Federal Reserve’s next policy steps. Additionally, earnings results from Oracle and Chewy are expected to provide important insight into both consumer demand and enterprise spending behavior. As investors brace for impactful data and earnings, platforms like Moneybase.com can help you stay informed and better positioned for market shifts.
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