- Stocks Gain, Dollar Falls as Trump Mulls Iran Role: Markets Wrap
Asian equities rose and the dollar declined, after the White House said President Donald Trump would decide
within two weeks whether Washington will join Israel in launching strikes against Iran. A gauge of regional
shares advanced 0.5%, with equity benchmarks in South Korea, Hong Kong and China all in the green. Contracts
for the S&P 500 were down around 0.2% from Wednesday’s close in the Asia session, compared with a 0.9%
drop on Thursday when US markets were closed for the Juneteenth holiday. Brent crude fell around 2% Friday
to temper gains from earlier in the week. Treasuries were steady while a gauge of the dollar headed for a
second day of declines. The yen strengthened to around 145 per dollar. - Brent futures down nearly $2 after U.S. delays decision on direct Iran involvement
Brent crude prices pared gains from the previous session and fell nearly $2 on Friday after the White House
delayed a decision on U.S. involvement in the Israel-Iran conflict, but they were still poised for a third straight
week in the black. Brent crude futures fell $1.89, or 2.4%, to $76.96 a barrel by 0255 GMT. On a weekly basis,
it was up 3.8%. The U.S. West Texas Intermediate crude for July – which did not settle on Thursday as it was a
U.S. holiday and expires on Friday – was up 53 cents, or 0.7%, to $75.67. The more liquid WTI for August rose
0.2%, or 17 cents to $73.67. Prices jumped almost 3% on Thursday as Israel bombed nuclear targets in Iran,
and Iran fired missiles and drones at Israel after hitting an Israeli hospital overnight. The week-old war between
Israel and Iran showed no signs of either side backing down. Brent futures trimmed previous session gains
following the White House’s comments that President Donald Trump will decide whether the U.S. will get
involved in the Israel-Iran conflict in the next two weeks. “Oil prices surged amid fears of increased U.S.
involvement in Israel’s conflict with Iran. However, the White House press secretary later suggested there was
still time for de-escalation,” said Phil Flynn, analyst at The Price Futures Group. Iran is the third-largest producer
among members of the Organization of the Petroleum Exporting Countries, extracting about 3.3 million barrels
per day of crude oil. About 18 million to 21 million bpd of oil and oil products move through the Strait of
Hormuz along Iran’s southern coast, and there is widespread concern the fighting could disrupt trade flows in
a blow to supplies. “The “two-week deadline” is a tactic Trump has used in other key decisions. Often these
deadlines expire without concrete action,.. which would see the crude oil price remain elevated and potentially
build on recent gains,” said Tony Sycamore, analyst at IG. - Gold heads for weekly fall as fewer Fed rate cut prospects weigh
Gold prices fell on Friday and were on track for a weekly decline, as an overall stronger dollar and the prospect
of fewer U.S. interest rate cuts offset support from rising geopolitical risks in the Middle East. Spot gold slipped
0.5% to $3,355.49 an ounce, as of 0245 GMT, and was down 2.2% for the week so far. U.S. gold futures shed
1% to $3,371.80. “Right now there’s a lot of fluid situation in the Middle East that causes traders not to take
any aggressive position both on the long side and the short side of the trades of the spectrum,” said Kelvin
Wong, a senior market analyst, Asia Pacific at OANDA. The conflict in the Middle East intensified on Thursday
when Israel bombed Iran’s nuclear sites, while Iran fired missile and drone strikes on Israel, including an
overnight attack on an Israeli hospital. Neither side has signaled an exit strategy. President Donald Trump will
decide in the next two weeks whether the U.S. will get involved in the Israel-Iran air war, the White House said
on Thursday, raising pressure on Tehran to come to the negotiating table. Meanwhile, Trump reiterated his
calls for the Federal Reserve to cut interest rates, saying the rates should be 2.5 percentage points lower. The
Fed held rates steady on Wednesday, and policymakers retained projections for two quarter-point rate cuts
this year. “Macroeconomic developments, particularly steady yields and renewed USD strength, have not
supported the (gold) price,” analysts at ANZ said in a note. “Rising inflation expectations and the Fed’s cautious
stance have weighed on market expectations around the number of rate cuts this year.” The dollar was set to
log its biggest weekly rise in over a month on Friday. A stronger greenback makes gold more expensive for
other currency holders. Elsewhere, spot silver slipped 1.6% to $35.82 per ounce. - Bank of England holds rates steady, but a summer cut could still be in the cards
The Bank of England kept its key interest rate on hold at 4.25% during its Thursday meeting, with economists
expecting the central bank to wait until August before it cuts again. Six out of nine of the BOE’s monetary policy
committee opted to hold rates with three opting for a 25-basis-points cut. “Underlying UK GDP [gross domestic
product] growth appears to have remained weak, and the labour market has continued to loosen, leading to
clearer signs that a margin of slack has opened up over time,” the central bank said in a statement. “Measures
of pay growth have continued to moderate and, as in May, the Committee expects a significant slowing over
the rest of the year,” it said, adding that the MPC “remains vigilant about the extent to which easing pay
pressures will feed through to consumer price inflation.” The policymakers’ decision to hold rates comes after
the latest data out Wednesday showed the U.K.’s annual inflation rate reached 3.4% in May, meeting analyst
expectations but lingering far above the bank’s target of 2%. - Rice prices in Japan more than double in May as core inflation jumps to highest levels since 2023
Rice prices in Japan more than doubled in May, spiking 101.7% year over year and marking their largest increase
in over half a century. The huge spike follows a 98.4% increase in April, and a rise of 92.1% year over year in
March. Japan’s rice prices have been in the spotlight in recent times, with the government releasing emergency
stockpiles to moderate the price of the country’s staple food. The surge in rice prices comes as Japan’s core
inflation rate climbed to 3.7% in May, marking its highest level since January 2023. The figure — which strips
out costs for fresh food — was higher than the 3.6% expected by economists polled by Reuters, and is above
April’s reading of 3.5%. Headline inflation came in at 3.5%, lower compared to the 3.6% in April. This marks the
38th straight month that inflation has run above the BOJ’s 2% target. The so-called “core-core” inflation rate,
which strips out prices of both fresh food and energy and is closely monitored by the BOJ, climbed to 3.3%
from 3% in the month before. - China keeps key lending rates steady after May cut as trade deal with U.S. eases growth worries
China kept its benchmark lending rates unchanged Friday, following sweeping monetary easing measures
rolled out last month, and as a trade deal with the U.S. eases some growth concerns. The People’s Bank of
China held the 1-year loan prime rate at 3.0% and 5-year LPR at 3.5%, according to a statement Friday, in line
with Reuters poll estimates. Last month, Chinese authorities cut the lending rates for the first time since
October by 10 basis points, in their bid to cushion the impact from trade tensions with Washington. A slew of
commercial banks also trimmed their deposit rates to protect their net interest margin. LPR, normally charged
to banks’ best clients, is calculated based on a survey of dozens of designated commercial banks that submit
proposed rates to the central bank. The 1-year LPR influences corporate and most household loans in China,
while the 5-year LPR serves as a benchmark for mortgage rates. Trade-war fears have receded to some extent
after U.S. and Chinese trade representatives earlier this month agreed to honor the consensus reached in
Geneva in May, allowing for rare earth and tech trade between the two countries while suspending prohibitive
levels of tariffs on each other. Chinese offshore yuan, which has strengthened over 2% this year, last traded at
7.1805 against the U.S. dollar, regaining ground after weakening to a record low of 7.4287 in early April when
U.S. President Donald Trump slapped an eye-watering 145% tariffs on the Chinese imports. - Samsung aims to catch up to Chinese rivals for thin foldable phones as Apple said to enter the fray
Samsung will unveil a thinner version of its flagship foldable smartphone at a launch likely set to take place
next month, as it battles Chinese rivals to deliver the slimmest devices to the market. Folding phones, which
have a single screen that can fold in half, came in focus when Samsung first launched such a device in 2019.
But Chinese players, in particular Honor and Oppo, have since aggressively released foldables that are thinner
and lighter than Samsung’s offerings. Why are slim foldables important? “With foldables, thinness has become
more critical than ever because people aren’t prepared to accept the compromise for a thicker and heavier
phone to get the real estate that a folding phone can deliver,” Ben Wood, chief analyst at CCS Insight, told
CNBC on Thursday. Honor, Oppo and other Chinese players have used their slim designs to differentiate
themselves from Samsung. Let’s look at a comparison: Samsung’s last foldable from 2024, the Galaxy Z Fold6,
is 12.1 millimeter ~(0.48 inches) thick when folded and weighs 239 grams (8.43 oz). Oppo’s Find N5, which was
released earlier this year, is 8.93 millimeters thick when closed and weighs 229 grams. The Honor Magic V3,
which was launched last year, is 9.2 millimeters when folded and weighs 226 grams. - Meta tried to buy Ilya Sutskever’s $32 billion AI startup, but is now planning to hire its CEO
Meta recently tried to acquire Safe Superintelligence, the AI startup launched by OpenAI co-founder Ilya
Sutskever, according to sources familiar with the matter. When Sutskever rebuffed the offer, Mark Zuckerberg
moved to recruit the startup’s CEO and co-founder Daniel Gross instead. Meta now plans to hire Gross and
former GitHub CEO Nat Friedman, and take a stake in their venture fund, to beef up the company’s AI team. - First Solar (NasdaqGS:FSLR) Revises 2025 Earnings Guidance Downward
First Solar recently experienced an 11% price increase over the last quarter. This movement coincides with
various developments, including the company’s partnership with Shoals Technologies Group, which aims to
bolster domestic manufacturing and enhance supply chains in the U.S. solar industry. Despite this progress,
First Solar revised its 2025 earnings guidance downward, citing challenges that may have influenced its stock
performance. In the broader market context, geopolitical tensions and interest rate decisions have created
volatility, yet First Solar’s initiatives in domestic manufacturing and expansion may have added resilience
amidst these dynamics. - Apple in talks with Indian cos to source iPhone manufacturing equipment-report
Apple Inc is scouting for Indian companies to manufacture the equipment required to build the company’s
flagship iPhone devices in the country, Business Standard reported on Thursday. The Cupertino, California
based technology giant plans to locally source the manufacturing equipment, which it will then supply to its
Indian vendors as it looks to build out its capacity in the country, the Business Standard report said, stating that
a senior official from India’s Ministry of Electronics and Information Technology had confirmed the
development. Apple (NASDAQ:AAPL) had earlier flagged plans to drastically increase its iPhone production in
India, especially as its manufacturing hubs in China face increased U.S. trade tariffs. While the company still
intends to maintain a manufacturing base in China, it has signaled intent to produce all of its U.S.-sold iPhones
in India. The company’s attempt to source iPhone manufacturing equipment from India also signals a bigger
pivot away from China, who is also a major producer of the capital equipment required to manufacture and
assemble iPhones. India has been steadily growing as an iPhone manufacturing hub for Apple, with
manufacturing majors such as Foxconn, Pegatron, and Tata Electronics all having largely ramped up their
production over the past two years. Foxconn, which is by far Apple’s largest supplier, plans to invest $1.5 billion
to build a new component factory in the Indian state of Tamil Nadu. - SpaceX Starship rocket explodes in setback to Musk’s Mars mission
SpaceX’s massive Starship spacecraft exploded into a dramatic fireball during testing in Texas late on
Wednesday, the latest in a series of setbacks for billionaire Elon Musk’s Mars rocket program. The explosion
occurred around 11 p.m. local time while Starship was on a test stand at its Brownsville, Texas Starbase while
preparing for the tenth test flight, SpaceX said in a post on Musk’s social-media platform X. The company
attributed it to a “major anomaly” and said all personnel were safe. Its engineering teams were investigating
the incident, and it was coordinating with local, state and federal agencies regarding environmental and safety
impacts, the company said. “Preliminary data suggests that a nitrogen COPV in the payload bay failed below
its proof pressure,” Musk said in a post on X, in a reference to a nitrogen gas storage unit known as a Composite
Overwrapped Pressure Vessel. “If further investigation confirms that this is what happened, it is the first time
ever for this design,” he continued. The Starship rocket appeared to experience at least two explosions in quick
succession, lighting up the night sky and sending debris flying, according to video capturing the moment it
exploded. The 400-foot (122-meter) tall Starship rocket system is at the core of Musk’s goal of sending humans
to Mars. But it has been beset by a string of failures this year. In late May, SpaceX’s Starship rocket spun out of
control about halfway through a flight without achieving some of its most important testing goals. The Starship
lifted off from SpaceX’s Starbase, Texas, launch site, flying beyond the point of two previous explosive attempts
earlier this year that sent debris streaking over Caribbean islands and forced dozens of airliners to divert course.
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