US Stocks Seesaw as Investors Weigh Potential Progress in US-China Trade Talks Against Soft Data

China–U.S. Trade War

Economic

Summary:

Trump held talks with Xi by phone on Thursday in an effort to iron out trade disputes between the world's two largest economies that have buffeted the global economy

Wall Street edged higher and crude prices advanced on Thursday as investors weighed new trade talks between U.S. President Donald Trump and Chinese President Xi Jinping against a spate of downbeat economic data ahead of Friday's crucial jobs report.

In choppy trading, the S&P 500 and the Nasdaq were last modestly lower and the Dow was barely in positive territory, while U.S. Treasury yields oscillated and gold weakened.

Trump held talks with Xi by phone on Thursday in an effort to iron out trade disputes between the world's two largest economies that have buffeted the global economy, and they agreed to further discussions, according to U.S. and Chinese summaries of their call.

"The market seems to be accepting that if they're talking they're not going to do anything drastic, and if they don't do anything drastic, then it's okay to buy stocks now," said Thomas Martin, Senior Portfolio Manager at GLOBALT in Atlanta. "People are just sort of guessing and wondering which way the wind is blowing and the wind keeps shifting."

"I think investors want to own stocks and they're afraid of missing out, but they also don't want to own stocks if it's going to be a disaster," Martin added.

Economic data showed initial jobless claims hit the highest level since October, while a 16.3% drop in imports - arising from Trump's erratic tariff policy - resulted in the narrowest U.S. trade gap since November 2023. US Stocks Seesaw as Investors Weigh Potential Progress in US-China Trade Talks Against Soft Data_1

US Stocks Seesaw as Investors Weigh Potential Progress in US-China Trade Talks Against Soft Data_1

Weaker-than-expected labor market data, including a 47% year-on-year jump in Challenger layoffs and a significant downside surprise in ADP's private payrolls, are dampening expectations for the Labor Department's closely watched May employment report expected on Friday.

But Matthew Keator, managing partner in the Keator Group in Lenox, Massachusetts believes the softer data could open the door for the Federal Reserve to implement more than one rate cut before the end of the year.

"With some of the more benign inflation numbers that have come through recently and a potential pick-up in jobless claims might give the Fed a little bit more cause to (cut interest rates) at least maybe more than once this year," Keator said.

"That could be an encouraging sign, particularly for some sectors."

The Dow Jones Industrial Average (.DJI), rose 62.89 points, or 0.15%, to 42,491.60, the S&P 500 (.SPX), fell 3.56 points, or 0.06%, to 5,967.38 and the Nasdaq Composite (.IXIC), fell 40.84 points, or 0.22%, to 19,419.88.

ECB CUTS RATES

As widely expected, the European Central Bank lowered its three key interest rates by 25 basis points, a decision based on its updated economic outlook now that inflation is currently around the central bank's 2% target.

Even so, European shares pared earlier gains to close only slightly in positive territory after ECB President Christine Lagarde appeared to float the possibility of a summer pause in its year-long easing cycle.

MSCI's gauge of stocks across the globe (.MIWD00000PUS), rose 0.17 points, or 0.0 2%, to 889.10.

The pan-European STOXX 600 (.STOXX), index rose 0.16%, while Europe's broad FTSEurofirst 300 index (.FTEU3), rose 4.07 points, or 0.19%.

Emerging market stocks (.MSCIEF), rose 9.86 points, or 0.84%, to 1,182.31. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS),closed higher by 0.82%, to 622.95, while Japan's Nikkei (.N225), fell 192.96 points, or 0.51%, to 37,554.49.

The dollar reversed earlier gains in the wake of the soft U.S. economic indicators and Lagarde's hints at an ECB rate pause.

The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, rose 0.02% to 98.81, with the euro up 0.14% at $1.1433.

Against the Japanese yen , the dollar strengthened 0.67% to 143.73.

U.S. Treasury yields wavered in choppy trading following the unexpected increase in jobless claims, the latest soft labor market data in advance of Friday's employment report.

The yield on benchmark U.S. 10-year notes rose 3 basis points to 4.395%, from 4.365% late on Wednesday.

The 30-year bond yield fell 0.2 basis points to 4.8856% from 4.888% late on Wednesday.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 5.1 basis points to 3.928%, from 3.877% late on Wednesday.

Crude oil prices rose after reports of the Trump/Xi call, which helped investors look past the U.S. stockpile buildup and Saudi Arabia's July price cuts for Asia.

U.S. crude rose 0.83% to settle at $63.37 per barrel, while Brent settled at $65.34 per barrel, up 0.74% on the day.

Gold prices reversed an earlier gain after the Trump-Xi call hinted at a thaw in trade relations between Washington and Beijing.

Spot gold fell 0.65% to $3,353.64 an ounce. U.S. gold futures fell 0.72% to $3,349.20 an ounce.

Source: Reuters

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Add to Favorites

Manuel

Political

From the moment Donald Trump and Elon Musk joined forces, betting in Washington held that the president’s bond with the First Buddy who bankrolled his comeback election win wouldn’t last.

The breakup finally arrived this week, an escalating tit-for-tat between the world’s richest man and the president of the US, who spent much of Thursday sniping at one another via social media posts and cameras in the Oval Office.

Speaking to reporters, Trump pronounced himself “very disappointed” in Musk over the billionaire’s harsh criticism of a Republican tax and spending bill. Posting on X, his social media platform, Musk declared that Trump wouldn’t have won a second term without his help. “Such ingratitude,” the Tesla Inc. and SpaceX CEO declared.

For a rift that had seemed inevitable, the descent into public recrimination was startling, even by Trump’s volatile standard, which often sees former allies and underlings cast aside without fanfare.

Musk spent the early months of Trump’s second term offering obsequious praise and absorbing some of the political backlash of the slashing budget cuts and employee firings that have been a pillar of Trump’s agenda. Trump, meanwhile, had elevated Musk, a government novice in a temporary role, to a position of unprecedented breadth to reshape and unmake the entire federal bureaucracy, with only occasional checks from the agency heads actually confirmed by the Senate.

But on Thursday, their blow-up found Trump accusing Musk of trying to tank the spending bill because its elimination of electric vehicle credits hurt Tesla’s bottom line, while Musk took to social media posts to deny Trump’s Oval Office comments and taunt the president with his own past postings. “Where is this guy today??” Musk wrote.

Musk went so far as to poll his social media followers about whether he should “create a new political party in America that actually represents the 80% in the middle?”

Their relationship first blossomed at the height of the 2024 presidential campaign and deepened as Musk joined the new administration to slash the federal bureaucracy — a role that aligned with the tech titan’s commercial interests and his politics with the philosophy of others in the incoming administration, like Russ Vought, the director of the Office and Management and Budget.

But it unraveled this week over the unavoidable task of putting the administration’s rhetoric about spending into practice, via a tax bill that’s the centerpiece of Trump’s domestic agenda.

With posts on social media urging lawmakers to reject Trump’s “Big Beautiful Bill,” Musk exposed a rupture that had been growing between him and the president for weeks, fueled at first by clashes with cabinet members over agency cuts and differences with the administration’s sweeping tariff plans.

Musk’s public break with Trump threatens further fallout for the allies he helped to install in key positions across federal agencies during his time overseeing the Department of Government Efficiency that he prodded Trump to create.

It also raises questions about whether the biggest billionaire spender of the 2024 election will remain a reliable source of campaign funding to sustain Republican control of the House in the midterm elections and to make permanent Trump’s political movement.

Steve Bannon, the former White House chief strategist who was deputized in 2017 to confront Musk about his demands for EV and battery mandates, said he cautioned Trump and his inner circle about the entrepreneur after the 2024 election.

“I warned people in the transition, this guy is unpredictable, immature and a narcissist, and he’d turn on anybody — including the president — when it suited him,” says Bannon, who has frequently criticized Musk on his “War Room” podcast.

Bannon says Musk’s downfall from his status as “Chief Buddy” was inevitable, because he could not produce the $1 trillion in budget cuts he claimed he could during the transition. “He was too incompetent and lied about being able to find a trillion dollars of cuts in waste, fraud and abuse,” says Bannon. “He misled everybody, including the president.”

Trump’s Orbit

Administration officials who have bristled at Musk’s power and bedside manner have been moving to reassert their influence in the executive branch since he announced his departure from DOGE, people familiar with the matter said.

That includes the installation of a close associate of White House Chief of Staff Susie Wiles as chief of staff at NASA – an agency that is crucial to SpaceX, a company that makes up a third of his net worth. People familiar with the matter said the withdrawal of the nomination of Jared Isaacman, a Musk ally who was poised to run the space agency, was driven by Sergio Gor – the director of the Presidential Personnel Office, with whom Musk had sparred during his DOGE tenure.

“A lot of Musk’s power stemmed from the fact that he was seen as an extension of Trump,” said Stephen Myrow, who runs Beacon Policy Advisers. “But now that there’s distance between them, that power might be waning.”

“I always talk about the ‘evolving orbit’ around Trump – people are always drifting in and out,” Myrow added. “I wouldn’t say Musk’s relationship with Trump is severed. But between Isaacman’s nomination being pulled and his public criticisms of the tax bill, he looks to be in the waning phase of his orbit.”

A White House official in an email pointed to multiple past donations that Isaacman had made to Democrats, suggesting that was the reason his nomination was nixed. In a podcast interview Wednesday, Isaacman said he didn’t believe that was the reason, given the information had long been publicly available.

“President Trump is the ultimate decision maker on who has the privilege of serving in his historic administration,” White House spokesperson Liz Huston said. “Any claims to the contrary are completely false.”

Musk didn’t respond to a message seeking comment. On X, his social media platform, one user said Isaacman’s removal was a “gut punch for the space agency,” to which Musk responded with a ‘100’ emoji, indicating he agreed 100%.

‘At Great Personal Cost’

The fissure caps a roller-coaster 11 months from Musk’s endorsement of Trump in July of 2024. Musk spent hundreds of millions of dollars to elect Trump and Republicans in 2024, and when the once and future president defeated Kamala Harris in November’s election, he turned to Musk to lead an effort to slash the size and scope of government.

Musk scythed through the federal bureaucracy while Trump unleashed a flurry of executive actions, each seeking to dismantle the administrative state at what the White House came to call “Trump speed.”

Yet swift progress on conservative priorities came with a price tag for Musk, who has seen his own net worth plummet in part because of reputational tarnish at home and abroad from his political actions and affiliation with Trump.

Musk’s net worth — much of it tied to the performance of Tesla — has dropped an estimated $64.1 billion so far this year, according to data compiled by Bloomberg Billionaires Index. It’s the largest on-paper loss of any of the world’s 500 richest people. Trump-Musk Alliance Unravels Over "Big Beautiful Bill"_1

Trump-Musk Alliance Unravels Over "Big Beautiful Bill"_1

And now, on his top political focus point of deficit reduction, any success Musk can claim — achieved, in his own words, “at great personal cost and risk” — may be drowned out by the president’s own signature legislation.

The Congressional Budget Office projected that the House-passed tax and spending bill at the center of Trump’s legislative agenda would add more than $2.4 trillion to US budget deficits over the next 10 years, slashing revenues by $3.67 trillion while only cutting spending by $1.25 trillion.

That’s way above even DOGE’s most optimistic savings estimates. Its government website listing estimated savings states that DOGE has saved taxpayers about $180 billion year-to-date. However its “Wall of Receipts” — a line-by-line list of contracts, grants and leases canceled since Inauguration Day — only accounts for less than half of that number.

Adding to the risk for Musk’s bottom line, Trump’s bill would wipe out some valuable tax incentives that bolster his own companies. Musk personally appealed to House Speaker Mike Johnson to save tax credits for electric vehicles, according to a person familiar with the matter, but ultimately lost that fight.

In an interview with Bloomberg Television on Thursday, Johnson did not confirm whether Musk had approached him over the credits, but said the two would speak later in the day, adding that Musk seems “pretty dug in right now, and I can’t quite understand the motivation behind it.”

Musk’s criticism of the spending package built slowly.

On Tuesday, however, Musk lashed out, posting on his social media platform, X, that the bill was “pork-filled” and “a disgusting abomination.”

Adding insult to injury for the White House, Musk has embraced the very argument that the administration has been trying to combat, noting the bill would significantly widen the federal budget deficit.

By Wednesday afternoon, Musk was posting about “debt slavery” and sharing an image of Uma Thurman holding a samurai sword — the poster for the film “Kill Bill.”

Widening Rift

The rift between the two billionaire showmen — each renowned for seeking out the spotlight, and not for sharing it — had seemed to be widening for a while.

Even as Musk embraced his DOGE role and continued making periodic appearances at the White House, he broke with some of Trump’s policies.

Musk has criticized tariffs, the primary tool in Trump’s economic agenda, but one that has shown the potential for massive disruption in markets Musk moves in, including those for batteries critical to the fate of Tesla’s automotive and energy units.

An outside Trump adviser said the president remained furious about an incident, reported by The New York Times, in which Musk angled to obtain a classified briefing from the Pentagon about the upshot of a war with China, where Musk has extensive economic interests, especially via Tesla.

As public furor grew over DOGE’s unilateral cuts to federal agencies, Trump publicly reined Musk in, asserting that cabinet officials would have final say over proposed reductions. Trump-Musk Alliance Unravels Over "Big Beautiful Bill"_2

Trump-Musk Alliance Unravels Over "Big Beautiful Bill"_2

In a May 20 appearance at the Qatar Economic Forum, Musk told Bloomberg’s Mishal Husain he intended to pull back from political giving, only months after spending nearly $300 million to boost Trump’s successful campaign for the White House.

Sour Taste

Behind the scenes, Musk’s sojourn through the West Wing left a sour taste for some officials, according to the outside adviser and one person within the administration.

The outside adviser particularly noted Musk’s brusque treatment of Wiles, who managed Trump’s victorious campaign before joining the administration. It was a longtime Wiles ally, Brian Hughes, who was sent to serve as NASA chief of staff, a position from which he could serve as a check in an agency that is central to SpaceX’s fortunes.

A senior White House official said Wiles and Musk had a cordial and collaborative relationship, and that the chief of staff met weekly with the tech entrepreneuer as he led DOGE.

The official said Hughes had long wanted to work at NASA, and that his placement there was not an effort to keep tabs on Musk and SpaceX.

A person familiar with SpaceX discounted the chance that bad blood between Musk and Trump would have an immediate negative effect on the company, because it has carved out such a dominant position in the launch business even as corporate rivals have struggled. But the person said there is frustration that the company’s brand has been damaged, first with Democrats who were appalled by Musk’s embrace of Trump and DOGE’s tactics, and now with Trump supporters in Washington, who will likely side with the president over Musk.

But Musk’s time with Trump has already yielded benefits in other ways, said Myrow, especially in areas where the administration or DOGE pulled the plug on aspects of the regulatory state that had previously tangled with his companies.

“For Musk personally, the SEC stuff went away,” Myrow said, referring to Securities and Exchange Commission investigations. “And he’s long wanted to turn X into an ‘everything app,’ and now a lot of the regulations that would have inhibited that are going away.”

Source: Bloomberg

Risk Warnings and Disclaimers

Add to Favorites

Adam

Stocks

Investors often skip over the utilities sector in favor of companies in higher-growth industries. Utilities stocks tend to be stable sources of dividend income and defensive plays. With all of the tumult in markets so far in 2025, though, the utilities sector has actually emerged as one of the most resilient sectors.

The Utilities Select Sector SPDR Fund (NYSE:), an exchange-traded fund (ETF) holding more than 30 of the top utilities names and a benchmark for the sector as a whole, has returned 8% year-to-date (YTD).

By comparison, the is up under 2% over the same period.

Utilities stocks have held strong due to consistent demand even as names in other sectors zig-zagged up and down amid general volatility and turmoil. Another factor buoying some utilities companies is their potential role in serving data centers that are key to AI and cloud technologies.

For investors seeking a utilities play that has the potential for growth to balance the sector’s natural defensiveness, a number of companies may strike the right balance of risk and reward.

Strong Growth for Mid-Atlantic Water Utility Across Business Lines

Mid-Atlantic region water and wastewater utilities provider Artesian Resources (NASDAQ:) saw shares climb by about 10% YTD, although with price-to-book and price-to-sales ratios of 1.53 and 3.24, respectively, shares appear to be fairly attractively valued nonetheless.

The company may draw investors’ interest because of its positive earnings surprise in May. With earnings per share (EPS) of 53 cents, Artesian topped analyst predictions by an impressive 18 cents per share. Quarterly revenue also exceeded predictions; analysts see room for further earnings growth.

Artesian’s earnings performance improved thanks to growth in both its water and wastewater revenue. During the quarter, the company increased its customer count and instituted a new distribution system improvement charge. The company’s service line protection plan gained in popularity, driving 8% year-over-year (YOY) growth in non-utility revenue.

With an increase in rates likely later this year, Artesian’s top line should continue to grow. This should only help the company to maintain or grow its attractive dividend yield of 3.58%, which it achieves with a healthy payout ratio of 59.13%.

Battery Systems Propels Clearway to EPS Beat

Clearway Energy (NYSE:) is primarily a renewable energy utilities firm, although it also operates a conventional energy business. What investors may be most drawn to in this company, however, are its battery storage operations. Its Honeycomb portfolio of battery energy storage systems in Utah began construction in March and is expected to reach commercialization in 2026.

It has helped further establish Clearway as a leader in dispatchable power, which is likely to become increasingly important in areas suffering from a lack of energy grid reliability in the future.

Clearway marked a successful first quarter of the year with an EPS beat, coming in at 3 cents per share when analysts have predicted a loss. Adjusted EBITDA for its renewables and storage segment climbed by about 30% YOY, and generation in that segment was 13% higher than the prior-year quarter.

While Clearway has a high dividend yield of 5.67%, it also sports a dividend payout ratio of 218.75%, meaning that it may be overpaying on dividends relative to its earnings. This is not a good sign for the company’s future dividend payments, unless it is able to maintain earnings growth.

Earnings Beat and Renewables Push Drive Enthusiasm for NiSource

Shares of and electric utility company NiSource (NYSE:) are up more than 8% YTD along with the broader utilities sector as the company recently beat earnings estimates by 8 cents per share.

The company also reaffirmed its long-term goal of 6–8% EPS growth, which analysts see coming to pass.

NiSource is in the early stages of a massive growth project.

The company plans to allocate $19 billion in expenditures toward 2,100 MW of renewables secured well below market prices.

Analysts have signed on unanimously to the company’s efforts, with all 10 that have reviewed NI shares offering a Buy rating.

What’s more, the firm pays out a healthy 2.84% dividend yield with a 60.54% payout ratio.

source : investing

Risk Warnings and Disclaimers

Add to Favorites

Adam

Cryptocurrency

Bitcoin and other altcoins continued their downward trend on Thursday as the recent bullish momentum faded.

Bitcoin btc-1.72% Bitcoin dropped briefly below $104,000 as the market capitalization of all coins fell by 1% to $3.27 trillion. Some of the top laggards were altcoins like Fartcoin fartcoin-9.83% Fartcoin, Dogwifhat wif-12.04% dogwifhat, Jupiter jup-11.3% Jupiter, and Ethena ena-10.85% Ethena.

Analysts suggest the ongoing pullback is a typical occurrence during bull markets, as some investors begin locking in profits. In a statement to crypto.news, Ryan Lee, Chief Analyst at Bitget Research, said:

“After a period of notable gains, many investors are locking in profits, which has triggered short-term sell-offs. This behavior is not unusual in bull cycles, where sharp rallies often lead to a wave of corrections as traders seek to de-risk their portfolios.”

Ryan added that the ongoing geopolitical developments like trade tensions from the US had contributed to market uncertainty and triggered a risk-off sentiment. He added that:

“While the overall outlook for digital assets remains positive, current price action suggests a cooling period, especially in speculative altcoins that saw outsized gains. Investor sentiment is being recalibrated in response to these developments.”

Historically, Bitcoin tends to pull back after reaching a key resistance level, often triggering a broader correction across altcoins. For example, BTC hit a record high of $108,335 in December before retreating to $88,987 in January. It later surged to a new all-time high of $109,300 in the same month.

Bitcoin price chart analysis points to an eventual rebound

BTC price chart

Technical indicators suggest that Bitcoin may be preparing for another rally, which could spark a broader altcoin rebound. On the daily chart, BTC is gradually forming a bullish flag pattern — characterized by a steep vertical rally (the flagpole) followed by a downward-sloping consolidation channel (the flag). This setup is typically viewed as a continuation pattern.

Bitcoin has also formed a cup-and-handle pattern, with the recent pullback forming the handle section. The cup features a depth of approximately 30%, or 34,000 points.

Using standard technical analysis, the target for a cup-and-handle breakout is calculated by adding the cup’s depth to its upper boundary. In this case, adding $38,000 to the top of the pattern yields a projected target of $146,000.

Source: crypto

Risk Warnings and Disclaimers

Add to Favorites

Owen Li

Economic

Donald Trump said on Thursday that he’s done with Elon Musk. Speaking from the White House, the president said Elon had been attacking his tax bill out of personal frustration.

Trump claimed the Tesla CEO was angry over the removal of electric vehicle tax credits and because his preferred NASA nominee, Jared Isaacman, got blocked by the administration. Trump’s announcement followed a full week of Elon hammering the bill on X and calling it a “disgusting abomination.”

Trump said Elon “knew” the bill would scrap the EV tax breaks. “He knew it… a long time ago,” Trump told reporters, referring to the removal of incentives that had pumped billions into Elon’s business. “Elon is upset because we took the EV mandate, which was a lot of money for electric vehicles,” Trump continued.

“And you know, they’re having a hard time, the electric vehicles, and they want us to pay billions of dollars in subsidy.” Trump also said, “You know, I’ve always liked Elon. I’d rather have him criticize me than the bill, because the bill is incredible.” He defended the bill, calling it his “One, Big, Beautiful Bill,” while dismissing Elon’s criticism as political.

Elon says he made Trump president as Tesla stock plunges

Elon responded in real time using his social platform, posting just one word: “Whatever.” But the billionaire didn’t stop there. He followed it up with another post attacking the bill’s content. “Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill,” Elon wrote.

Then he mocked Trump’s branding of the legislation, adding: “In the entire history of civilization, there has never been legislation that is both big and beautiful. Everyone knows this! Either you get a big and ugly bill or a slim and beautiful bill. Slim and beautiful is the way.”

Elon also pushed back against Trump’s claim that he had prior knowledge of the EV credit cuts. “False,” he wrote. “This bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!”

But just when we thought it was over, Elon went even lower, saying, “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate. Such ingratitude.”

These public attacks coincided with Tesla’s stock dropping by about 4% on Thursday, erasing part of its 22% rally in May. Tesla shares are now down over 20% for the year, far from their $488.54 peak hit on December 18.

Trump allies blocked Elon’s NASA pick, says biographer

Walter Isaacson, who published a biography on Elon last year, said on Thursday that there was another key reason behind Elon’s fallout with Trump’s inner circle. Elon had pushed for his friend Jared Isaacman to take over as NASA administrator.

But that proposal was reportedly blocked by Trump officials. “That, to Musk, was just infuriating,” Isaacson said. “Because they were going after Jared Isaacman… to get at Musk.” The biographer said Elon took it as a personal betrayal and added that the move was meant to limit his influence.

The breakdown in their relationship comes just months after Elon was Trump’s single largest campaign donor, pouring more than $250 million into the 2024 reelection effort. At the time, Elon had not only given money but also taken on a temporary advisory position.

Source: CryptoSlate

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

Add to Favorites

Adam

Bond

Treasury yields climbed Thursday as a selloff in European government bonds overshadowed weakening US labor market data.

The price action highlighted the monetary-policy divergence between the regions. Euro-zone yields rose after the European Central Bank, which cut interest rates as expected, indicated it may not do so again, prompting traders to reposition.

US yields rebounded from session lows reached after an unexpected increase in new jobless claims caused traders to briefly price in an earlier start to Federal Reserve interest-rate cuts — in September versus October.

With more comprehensive May employment data to be released Friday, the claims figures highlighted the prospect that the Fed will act to prevent further labor-market erosion, even as short-term inflation expectations have picked up based on the Trump administration’s tariff’s agenda.

“Market pricing now shows a big gap between ECB and Fed rate-cut expectations for 2025,” said Hussain Mehdi, director of investment strategy at HSBC Asset Management. “The Fed remains hamstrung by inflation amid the supply shock that is higher tariffs,” which likely “keeps US yields sticky.”

Treasury yields were mostly higher at midday in New York, after erasing declines. The two-year note’s yield, more sensitive than longer-dated yields to shifting expectations for Fed policy, was higher by about four basis points after erasing a similar-magnitude decline. Swap contracts ceased to fully price in a September rate cut, while continuing to price in at least two quarter-point cuts by year-end.

Most euro-zone two-year yields ended higher by at least five basis points, after ECB President Christine Lagarde said the central bank was approaching the end of its monetary policy cycle and may revise its growth forecast higher in the future.

Bond-market momentum also was sapped after reports US President Donald Trump and Chinese President Xi Jinping held their first official phone call since Trump took office in January. Trade tensions between the world’s two largest economies have caused bouts of risk aversion and capital flows from stocks into bonds.

The Treasury market rally sparked by the jobless claims data followed its biggest daily advance in two months on Wednesday, also in response to a weak job-market indicator.

“The economy is slowing,” Krishna Memani, chief investment officer for Lafayette College, said on Bloomberg Television. “The hard data is softening. There is a substantial trend for slowing in the economy” that “gives the Fed the path to cut rates, not today, but in the later half of the year.”

As measured by the Bloomberg Treasury Index, Wednesday’s gain — sparked by a sub-par gauge of private-sector job growth — was the biggest since April 3. Futures open-interest data released after the close indicated new long positions were set, and the 10-year note contract’s price reached a level that was likely to cause shorts to cover, interest-rate strategists at Citigroup said.

That may have amplified the market’s reaction to the jobless claims data.

“The claims numbers are trending higher but it’s not in alarming territory,” said Gregory Faranello, head of US rates trading and strategy for AmeriVet Securities.

Friday’s employment data are expected to show nonfarm payrolls increased by 125,000 in May, following a 177,000 jump in April. Faranello said it would take an increase of less than 100,000 to spur Treasury yields to new weekly lows.

Earlier Thursday, Treasuries firmed after a sale of Japanese 30-year bonds drew better-than-expected demand. Still, US bonds continue to struggle with investor concern about the nation’s fiscal outlook.

The 30-year Treasury yield remains more than 20 basis points higher since the end of April. Catalysts included Moody’s Ratings stripping the nation of its last top-tier credit score and the US House of Representatives passing a multi-trillion dollar bill extending tax cuts.

“Fiscal concerns in the US will prevent any meaningful rally,” said Mohit Kumar, chief European strategist at Jefferies International. He expects 10-year yields to trade in a 4.25% to 4.75% range despite softening economic data. “If we rally toward 4.25% in 10s we would use that opportunity to reset a short position.”

source : Bloomberg

Risk Warnings and Disclaimers

Add to Favorites

Adam

Stocks

Trade Tensions Resurface After Trump-Xi Phone Call

U.S. equities pulled back Thursday as traders digested renewed trade developments between Washington and Beijing. The S&P 500 and Nasdaq both slipped 0.2%, while the Dow lost 135 points, or 0.3%. Chinese state media reported that Presidents Trump and Xi spoke via phone—a move initiated by Trump, according to China’s foreign ministry.

While this sparked a brief bump in equities, investor focus remained locked on the potential for further deterioration in U.S.-China relations.

Markets had rallied sharply in May, with the S&P 500 posting a 6% gain and reaching a post-tariff high of 5,970.81 on Wednesday. But escalating geopolitical risk and a mixed labor market backdrop are now testing that momentum.

Mixed Economic Data Raises Stakes for Friday’s Payrolls

A wave of U.S. economic releases on Thursday sent conflicting signals. Initial jobless claims rose to 247,000, surpassing expectations, while ADP private payrolls added just 37,000 jobs in May, missing the 110,000 forecast. Meanwhile, unit labor costs jumped 6.6% in Q1 and productivity fell more than expected, increasing pressure on corporate margins.

The May trade deficit narrowed sharply to $61.6 billion—the largest monthly drop on record—driven by a 16.3% plunge in imports as firms unwound inventory buildup from earlier tariff fears.

These figures paint a mixed picture: wage pressures remain elevated even as job growth softens and global trade cools. All eyes are now on Friday’s nonfarm payrolls report, with a print below the 125,000 consensus likely to revive rate-cut speculation.

Tech, Retail, and Software Stocks Lead Sector Movers

Despite broader market softness, pockets of strength emerged in tech and consumer names. MongoDB surged 17% after blowing past earnings expectations, while Verint Systems jumped 18% on strong revenue and margin performance.

Budget retailer Five Below climbed 7% after posting upbeat guidance and Q1 results, while Lands’ End added 8% after outlining strategies to offset tariff pressure.

Planet Labs soared 20% after posting positive free cash flow for the first time.

On the downside, Brown-Forman plunged 10% following a revenue miss, and PVH slid 8% after cutting Q2 EPS guidance due to tariff costs.

Outlook: Jobs Data Will Guide Fed Expectations and Equity Direction

While the Nasdaq leads weekly gains with a 1.7% advance, short-term sentiment hinges on Friday’s labor print. A weak report could reinforce expectations for a Fed pivot and support risk assets. But if wage pressures persist without corresponding job growth, margin concerns could resurface. Traders are watching closely—especially with equities sitting near recent highs.