Last day of Trump tariff proposals, stock market news and geopolitics
Latest stock market news
• Strong labor market data has boosted risk appetite, with stocks up 0.6% on average. Small caps have led the gains, a good sign of broader market size. Semiconductors are also rallying.
It's a quiet morning.
Crypto has yet to rally.
• Today marks the deadline for US trading partners to submit their “best offers” to avoid hard tariffs on imports. US tariffs on imported steel and aluminium also come into effect, and investors are more nervous than usual. So far, only Britain has reached a tentative trade deal with the US during Trump’s 90-day pause on a wider range of tariffs. That pause is due to expire in about five weeks, and investors are worried about the lack of progress on deals.
• Adding to concerns, Japan's Chief Cabinet Secretary Yoshimasa Hayashi said Tokyo had not received a letter from Washington asking for its best proposals for trade talks.
• Trump's on-and-off tariff statements have sent investors fleeing U.S. assets this year and seeking safe havens and alternatives, including gold, as they expect trade uncertainty to take a heavy toll on the global economy.
The big question in financial markets was where the money that typically flowed into U.S. assets would end up. For years, money managers held to the fatalistic assumption that “there is no alternative” (TINA… yes, markets love acronyms), but perhaps there are options now.
As Manishi Raychaudhuri, founder and CEO of Emmer Capital Partners Ltd, puts it: “While Europe may be the obvious destination, relative valuations may favor emerging Asia.” The data doesn’t tell the full story yet. But it does show that investors are reducing their exposure to U.S. assets, and only time will tell where they end up.
• Market hopes for Trump-Xi talks: Asian markets rose on Wednesday, helped by gains in tech stocks, as traders hoped a deal was still possible if U.S. President Donald Trump and Chinese leader Xi Jinping meet this week. South Korean assets were also in focus in Asia. Seoul's benchmark index jumped to a 10-month high and the currency strengthened as the election victory of liberal presidential candidate Lee Jae-myung raised expectations for swift economic stimulus and market reforms.
• Musk's companies have begun to report positive developments as he returns from big politics back to work - CNBC
Elon Musk's xAI plans to sell shares at a valuation of $113 billion - FT.
After this secondary share offering, the company plans an even larger round of investment.
Elon Musk's xAI is seeking $5 billion in debt financing through Morgan Stanley (MS).
The funds will be used to develop AI infrastructure.
• The European Commission has fined Glovo and Delivery Hero €329 million. Following an investigation launched in July 2024, the EC concluded that the companies allocated markets, exchanged confidential information and agreed not to poach employees.
• Central banks bought 12 tonnes of gold in April, the second month in a row that the pace of purchases slowed. Poland led the way, while India released updated data on how much it holds. Several African central banks also said they planned to increase their gold reserves.
• Xiaomi founder expects company's EV business to turn profitable in 2H 2025
• Deutsche raised its year-end S&P 500 forecast to 6,550 from 6,150
, citing tariffs as improving and a lesser-than-expected hit to corporate profits and a resilient U.S. economy.
• In Germany, more than 20,000 Volkswagen employees have agreed to early termination of their employment contracts over the next 4 years - Bild.
• Meta (META, -0.6%) signed the largest energy deal in its history,
a 20-year contract with Constellation to purchase 1.1 GW of nuclear power for its data centers starting in 2027.
• CEG initially rose 15% in premarket trading but ended the day down 0.13%. Apparently the news was in the price and the big players took advantage of the news to take profits.
• WhatsApp will introduce usernames that can be used instead of a phone number.
The feature is currently undergoing beta testing. It will be available to all users with the next iOS update.
• BASF is selling its paints and coatings business for $6.8 billion.
Carlyle (CG) and Blackstone (BX) have expressed interest. Revenue in 2024 is €4.3 billion.
• TSMC (TSM, +1.4%) said demand for AI chips is outpacing supply despite U.S. tariffs.
The company expects AI revenue to double in 2025.
• Coinbase (COIN, +4.9%) suffered a data breach by contractor TaskUs (TASK, -0.3%),
with potential losses of up to $400 million. TaskUs laid off 200 employees.
• Airbus (EASDY) cut May aircraft deliveries 4% to 51.
Accenture (ACN, -0.5%) will acquire Italian aerospace engineering business SIPAL, adding 250 engineers.
• Hims & Hers (HIMS, -3.6%) buys ZAVA to expand in Europe.
Profitability expected from 2026.
• Dollar General (DG, +16%): EPS $1.78 (+$0.29), revenue $10.44 billion.
• Buoyed by new stores. Automakers posted strong sales gains in May as price cuts and inventory reductions blunted the impact of auto tariffs. The question is how long they can maintain pricing instead of trading.
• Oil continues to rise as wildfires in Canada offset news of OPEC+ output increases.
• Chime's (CHYM) IPO terms show fintech valuations are back in touch with reality. Online bank Chime's implied market cap ($9.5 billion) is roughly 5.7 times its 2024 revenue ($1.67 billion), almost exactly in line with SoFi Technologies.
• CRWD shares fall 6% after the report. The company reported well and announced a $1 billion buyback.
But it gave a weak forecast and had already grown strongly before the report.
• HPE shares rise 5% after earnings, with the company noting that its product lineup is beginning to reflect the latest developments in AI in the Middle East.
The company is looking ahead to the July 9 trial date in HPE's battle with the U.S. Justice Department, which filed a lawsuit aimed at blocking HPE's anticipated deal with Juniper Networks.
• WFC shares rise 3% in premarket trading as Fed lifts order limiting the value of assets Wells Fargo can hold.
• European futures point to a modest gain at the open ahead of a series of manufacturing data from the region and the start of the European Central Bank's policy meeting.
• The ECB is almost certain to cut rates on Thursday and continue its easing cycle as muted wage growth, a strong euro and sluggish economic growth point to weakening inflation. Data on Tuesday showed euro zone inflation fell below the ECB's 2% target in May.
Key events that could impact markets on Wednesday:
- Economic events: May PMI data for the UK, eurozone, Germany and France.
Current Fundamental Reviews
• Bostic (Fed) said he still sees the possibility of one rate cut this year,
provided economic conditions allow it.
• Eurozone inflation and labor market indicators.
Flash Core CPI m/m = 0.0% (pop. 1.0%), y/y = 2.3% (pop. 2.7%).
Flash CPI y/y = 1.9% (pop. 2.2%), m/m = 0.0% (pop. 0.6%).
Unemployment Rate 6.2% (pop. 6.3% adjusted).
Eurozone inflation slowed to below 2%, supporting the thesis of further ECB rate cuts - BBG.
• US - JOLTS Job Openings = 7.391m (expected 7.110m / previously 7.200m)
/ The US labour market remains strong.
Expect another big block of data on Friday.
US M2 money supply hits record high - Compound data.
/ This suggests dollar liquidity.
The OECD has cut its global growth forecast for 2025 to 2.9%
from 3.3% in December 2024 and 3.1% in March 2025.
• Musk exploded. “I’m sorry, but I can’t take it anymore. This huge, outrageous, pig-swilling Congressional spending bill is a disgusting abomination.
Shame on those who voted for it: You know you did it wrong. You know it.
It will massively increase the already gigantic budget deficit to $2.5 trillion (!!!) and saddle the American people with unsustainable debt.
Congress is bankrupting America.”
The White House confirmed after Musk’s words that Trump continues to support the bill.
• Trump signs executive order raising tariffs on steel and aluminum from 25% to 50%. BMO expert: “This will slightly raise the average U.S. tariff rate to about 15%, but more worryingly, it could set a precedent for possible tariff increases on motor vehicles and other industry products such as lumber and microchips, which are currently under investigation.”
• White House: Trump-Xi talks coming soon
Donald Trump's administration is urging countries to submit their best trade deals by Wednesday
U.S. officials are seeking to speed up consultations with a range of partners ahead of a self-imposed 90-day deadline, according to a draft letter to trading partners seen by Reuters.
• The EU is preparing for a new round of trade talks with the US and is warning that it could speed up retaliatory measures if Trump follows through on his threats of new tariffs – the latest of which is a 50% duty on steel and aluminium imports – Bloomberg.
New US sanctions against Russian oil exports could expose the EU to a 500% duty from the US, the European Commission has acknowledged.
It also confirmed that “a number of EU countries continue to purchase Russian carbon resources.”
Sixteen of the 27 EU countries have asked the European Commission for permission to increase their budget deficits by 1.5% in order to increase military spending. - EC press service.
• If tariffs are lifted, the US has no chance of economic survival - Trump.
• Canada in talks with China to lift mutual tariffs - Canadian PM Carney.
• Trump: Hello, Poland, you have chosen a WINNER! "The coalition is ready for this situation."
Tusk will ask parliament for a vote of confidence in his government after Trzaskowski's defeat.
• Vucic announced an attempted coup in Serbia.
According to him, the attempted coup affected kindergartens, schools, health care facilities and energy facilities.
• The Dutch Prime Minister has announced the resignation of the government
following the withdrawal of the far-right Freedom Party from the coalition.