- Asian Stocks Rise as US-China Talks to Continue: Markets Wrap
Asian shares edged higher on Tuesday, buoyed by expectations about the US-China trade talks as officials struck
a positive tone after the first day of negotiations. A regional stock gauge rose 0.4% as talks between the US and
Chinese officials were set to resume Tuesday. Shares in Hong Kong and China traded within a tight range, while
US equity-index futures advanced. The dollar consolidated around levels last seen in 2023. Treasuries steadied
after yields on the 10-year US bonds fell in the last session to 4.47% as inflation expectations eased. While no
significant breakthroughs were announced after the first day of talks and stocks pared some of their earlier
gains, US officials sounded optimistic about the negotiations. With a key inflation read on tap Wednesday –
and the Federal Reserve is entering a blackout period before its June 18 interest-rate decision – money
managers are wrestling with what could propel the S&P 500 back to a record after the index soared 20% from
its April lows. - S&P 500 posts back-to-back gain as traders optimistic U.S-China trade talks making progress
The S&P 500 closed marginally higher on Monday as President Donald Trump’s officials met with their Chinese
counterparts in an effort to resolve trade issues between the two economic giants. The broad market index
added 0.09% and notched a second winning session, closing at 6,005.88. The Nasdaq Composite climbed 0.31%
to end at 19,591.24. The Dow Jones Industrial Average ticked down 1.11 points and closed at 42,761.76. - Oil inches up, outcome of U.S.-China trade talks awaited
Oil prices edged up on Tuesday as market participants waited for the outcome of U.S.-China talks that could
pave the way for easing trade tensions and improve fuel demand. Brent crude futures edged up 12 cents to
$67.16 a barrel at 0041 GMT. U.S. West Texas Intermediate crude was trading up 13 cents at $65.42, after
hitting its highest since April 4 earlier in the session. On Monday, Brent had risen to $67.19, the highest since
April 28, buoyed by the prospect of a U.S.-China trade deal. U.S.-China trade talks were set to continue for a
second day in London as top officials aimed to ease tensions that have expanded from tariffs to rare earth
curbs, risking global supply chain disruptions and slower growth. U.S. President Donald Trump said on Monday
that the talks were going well and he was “only getting good reports” from his team in London. A trade deal
between the U.S. and China could support the global economic outlook and boost demand for commodities
including oil. Elsewhere, Iran said it would soon hand a counter-proposal for a nuclear deal to the U.S. in
response to a U.S. offer that Tehran deems “unacceptable”, while Trump made clear that the two sides
remained at odds over whether the country would be allowed to continue enriching uranium on Iranian soil.
Iran is the third-largest producer among members of the Organization of the Petroleum Exporting Countries
and any easing of U.S. sanctions on Iran would allow it to export more oil, weighing on global crude prices. - Gold falls as traders watch US-China trade talks in London
Gold declined on Tuesday as market participants awaited further developments from ongoing U.S.-China trade
talks in London, with negotiations extending into a second day. Spot gold fell 0.5% to $3,311.16 an ounce, as
of 0125 GMT. U.S. gold futures also fell 0.7% to $3,330.90. High-level trade talks between the U.S. and Chinese
officials are extending into a second day, with discussions encompassing issues ranging from tariffs to rare
earth restrictions. “With these key the U.S.-China trade talks still in the works, gold is trading reservedly until
we see what if any progress is made between the two global superpowers,” said Tim Waterer, chief market
analyst at KCM Trade. U.S. President Donald Trump said his administration was “doing well” in the negotiations
and noted positive reports from the talks. Last month, both sides agreed to a temporary pause tariffs, offering
some relief to financial markets. “If traders come away from the U.S.-China talks this week thinking that the
two nations remain on track to achieve a broader trade deal, safe-haven demand for assets such as gold could
ease.” Data from China showed export growth slowed to a three-month low in May as U.S. tariffs impacted
shipments, while factory-gate deflation worsened to its deepest level in two years. Meanwhile, investors are
now awaiting U.S. inflation data on Wednesday for more cues on the Federal Reserve’s monetary policy path. - China and U.S. set to continue trade talks as Trump touts ‘good reports’ from London
U.S. trade officials met with their Chinese counterparts in London on Monday for talks. U.S. Treasury Secretary
Scott Bessent, Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer met China’s vice
premier, He Lifeng, Beijing’s lead trade negotiator. Both sides temporarily slashed tariffs on each other’s
imports to allow trade talks to continue, but disagreements remain. - OpenAI hits $10 billion in annual recurring revenue fueled by ChatGPT growth
OpenAI has hit $10 billion in annual recurring revenue, according to a company spokesperson. The milestone
comes roughly two and a half years after the company launched its popular ChatGPT chatbot. The figure
includes revenue from the company’s consumer products, ChatGPT business products and its API, an OpenAI
spokesperson says. - AST SpaceMobile soars on speculation of strategic tie-up with Jeff Bezos
Shares of Ast Spacemobile Inc (NASDAQ:ASTS) climbed 7.1% higher after Wednesday’s open, building on a 4.3%
gain from the previous session, as investors responded to renewed speculation around a potential strategic
tie-up with Jeff Bezos’ Blue Origin, or even Amazon (NASDAQ:AMZN) itself. The rally was triggered by an
Instagram post from board member Adriana Cisneros showing herself, ASTS CEO Abel Avellan, and Bezos
together, captioned: “Amazing things are happening at AST & Science + Blue Origin.” The significance of the
meeting, which came just days after Blue Origin executives visited ASTS headquarters in Texas, was
underscored by subtle details, as Scotiabank (TSX:BNS) pointed out that Cisneros and Avellan wore guest
badges and Bezos did not. The setting and context have prompted speculation that discussions may have
moved beyond previously disclosed launch logistics to cover broader strategic and financial matters. ASTS
already holds a major commercial agreement with Blue Origin for the launch of up to 45 BlueBird Block 2
satellites, with options for 15 more. Each New Glenn launch can carry up to eight satellites, making ASTS one
of Blue Origin’s top launch customers and a potentially attractive partner for further collaboration. - Qualcomm Inc. has agreed to buy London-listed semiconductor company Alphawave IP Group Plc for
about $2.4 billion in cash to expand its technology for artificial intelligence
The offer equates to about 183 pence per share for Alphawave, the companies said in a statement on Monday.
The deal, which is still subject to regulatory and shareholder approval, is expected to close in the first quarter
of 2026. Qualcomm Chief Executive Officer Cristiano Amon is looking to lessen the company’s reliance on the
smartphone market, where growth has slowed, and push into new areas. Alphawave makes high-speed
semiconductor and connectivity technology that can be used for data centers and AI applications, two growth
areas in the chip industry that are being driven by demand for products like OpenAI’s ChatGPT. Alphawave’s
board has unanimously recommended the cash offer. Investors representing 75% of shares must vote in favor
of the deal for it to go through. Alphawave shareholders and directors representing about 50% of shares have
agreed to vote in favor of the deal, the company said. Alphawave shares rose 21% to 181.10 pence at 8:15 a.m.
in London on Monday. The shares had closed at 93.50 pence on March 31, the day before Qualcomm and
Alphawave first disclosed their talks. Alphawave, which held an initial public offering in 2021 at 410 pence per
share, has consistently traded below that level. The company had struggled with a reliance on large
customers and navigating geopolitical tensions between the US and China, where Alphawave decided to cut
back its business last year. Still, the company’s technology has been gaining traction and had reported a surge
in orders in the fourth quarter. Chief Executive Officer Tony Pialis said in a statement at the time that orders
from North American AI customers were driving the business. As an alternative to the cash offer, Alphawave
shareholders can also opt to exchange their stock for 0.01662 shares of Qualcomm. Qualcomm has also said
that each Alphawave share could be exchanged for 0.00964 of a new “series A Qualcomm exchangeable
security” and 0.00698 of a new “series B Qualcomm exchangeable security.” The Alphawave directors declined
to recommend the alternative offers. In particular, they said they’re unable to declare whether the second
alternative deal, where shareholders trade stock for exchangeable securities, is fair and reasonable “given the
significant and variable impact of the advantages and disadvantages.” - Shares of hospital operators are tumbling in Monday trading with Universal Health Services and Tenet
Healthcare declining the most
During a Monday presentation at the Goldman Sachs Global Healthcare Conference, Universal Health’s
CFO Steve Filton flags that the length of stay for patients at the hospital chain is “still higher” than pre-Covid
levels. Filton notes that some patients who are discharged from an acute-care hospital might be discharged
into other health facilities like nursing homes or rehabs, and “we find often that placing those patients in those
types of settings can be challenging and patients stay a day or two or three days longer just because we don’t
have a place that can accept them”. Says labor shortages have impacted staffing in sub-acute facilities like
nursing homes or behavioral hospitals. Notes the hospital chain is paid a flat amount for the term of a patient’s
admission and “the sooner they’re discharged, the more profitable we’ll be”. RBC Capital Markets analyst Ben
Hendrix believes the weakness in hospital names stems from concerns over potential cuts to state-directed
Medicaid payments after a presidential memo on Friday. “While optically hawkish, we believe Friday’s
presidential memo is consistent with grandfathering of existing state-directed payment programs as provided
in the current language of the budget bill. As such, we see little to suggest that the memo represents an
incremental headwind to hospital earnings,” Hendrix writes in a note. - Apple introduces iOS 26 with new design and intelligence features
Apple Inc. (AAPL), the world’s largest technology company by market value at $3.01 trillion, has unveiled iOS
26, a substantial update to its mobile operating system, featuring a refreshed design and enhanced Apple
Intelligence capabilities. The update, which is currently available for developer testing, is expected to be
released to the public this fall. According to InvestingPro analysis, Apple maintains its position as a prominent
player in the Technology Hardware sector, though current valuations suggest the stock is trading above its Fair
Value. For deeper insights into Apple’s valuation and 12 additional exclusive ProTips, explore InvestingPro’s
comprehensive research report. The new iOS version introduces a “Liquid Glass” design, adding a translucent
material that reflects and refracts the surroundings, aiming to bring focus to content and vitality to the system’s
controls and navigation. This design also extends to the Home Screen and Lock Screen, offering more
personalization options. Apple Intelligence has been expanded to provide live translation in Messages,
FaceTime, and Phone, facilitating cross-language communication. This feature is powered by Apple-built
models that operate entirely on the device, ensuring privacy for users’ conversations. Moreover, visual
intelligence now allows users to search and take action on anything they view across apps, such as adding
events to their calendar or searching for similar images and products on supported platforms like Google and
Etsy. iOS 26 enhances the Phone app with a unified layout and introduces Call Screening to help users manage
unwanted calls. Messages now include message screening from unknown senders and new conversation
enhancements, such as custom backgrounds and polls. - BNP Paribas Exane dubs Goodyear “tariff winner,” shares surge
Shares of Goodyear Tire & Rubber Co (NASDAQ:GT) soared 10.7% on Monday following an upgrade by BNP
Paribas (OTC:BNPQY) Exane, which dubbed the company a “true tariff winner” and heightened the price target.
Analyst James Picariello elevated the stock to Outperform from Neutral, highlighting Goodyear’s estimated
10.5 percentage points cost advantage in the U.S. due to tariffs and its potential for price/mix-led earnings
growth. Picariello’s report indicated that Goodyear’s cost advantage stems from the current Section 232 auto
tariffs, which levy a 25% duty rate on about 55% of all U.S. tires sold that are non-USMCA-compliant. As
Goodyear is the largest tire producer in North America and only 12% of its U.S. sales are subject to these tariffs,
the company enjoys a significant cost benefit. The analyst expressed confidence in Goodyear’s ability to
leverage this advantage for earnings upside, emphasizing the industry’s need to price for tariffs. The report
also noted Goodyear’s progress in narrowing its margin gap compared to peers and reducing net leverage,
which is expected to reach healthy levels by next year. The success of the ’Goodyear Forward’ cost savings
initiative, which is on track to achieve more than $1.5 billion by the first half of 2026, and the company’s
effective divestitures are contributing to this positive outlook. In light of these developments, BNP Paribas
Exane has raised its estimates for Goodyear’s EBIT and EPS for 2026-2027, with the new price target set at $15,
up from the previous $11. This valuation is based on an unchanged multiple of approximately 4.4 times the
estimated 2026 EV/EBITDA, compared to peers at 4.9 times, reflecting Goodyear’s net leverage and
profitability. - TSMC May sales surge nearly 40% on robust AI demand
TSMC (TW:2330) (NYSE:TSM), known formally as Taiwan Semiconductor Manufacturing Corp, clocked a nearly
40% jump in its May sales on Tuesday, as the chipmaking giant continued to benefit from robust artificial
intelligence-fueled demand. TSMC’s May sales grew 39.6% year-on-year to T$320.52 billion ($10.71 billion),
the company said in a statement. This brought its year-to-date revenue to T$1.51 trillion, up 42.6% from the
first five months of 2024. Still, TSMC’s May revenue fell 8.3% from a record high $349.56 billion seen in April,
reflecting a mild cooling in demand, especially as the company’s major customers, including Nvidia
Corp (NASDAQ:NVDA), grappled with increased U.S. restrictions on sales to China. Strength in the Taiwan dollar
through May also weighed on TSMC’s top-line, given that a bulk of its revenues come from international
markets. But outside China, demand for Nvidia’s chips, which are at the heart an AI-fueled increase in chip
demand– remained strong, especially among Wall Street’s so-called AI hyperscalers. Recent quarterly earnings
showed Wall Street’s biggest tech firms continued to spend big on AI chips and infrastructure, and signaled
that they will continue to do so in the coming months, heralding robust chip demand for TSMC. TSMC CEO C.C.
Wei had signaled during the company’s annual shareholders meeting last week that higher prices stemming
from steep tariffs could weigh on some demand for TSMC’s products. But he reiterated that AI-fueled demand
remained strong.
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