- Dollar, Stock Futures Drop on Trump Tariff Threat: Markets Wrap
US equity-index futures fell along with the dollar after President Donald Trump said he will set unilateral tariff
rates within two weeks, dialing up trade tensions once again. Haven assets such as Treasuries and gold rose.
Contracts for the S&P 500 and the Nasdaq 100 dropped 0.3% after Trump said he will send letters to trading
partners setting tariffs. A gauge of the dollar slid 0.3% to touch its lowest since July 2023, with the safe-haven
yen and Swiss franc leading the advance against the greenback. Gold rose 0.5%. Asian shares edged up 0.1%.
Oil dropped 0.4%, after jumping earlier Thursday on tensions in the Middle East. Treasuries extended
Wednesday’s gains after a combination of benign inflation data and strong demand at a 10-year auction sent
yields lower for a fourth day, the longest losing streak since end-April. The focus for bond investors now
switches to the sale of 30-year debt on Thursday. The latest tariff threat came a day after Chinese and US
officials struck a positive tone following their talks to dial down tensions. Amid US talking with countries
including India and Japan to lower the levies, some investors see Trump’s comments as an effort to ramp up
urgency in talks. - S&P 500 closes lower, snapping 3-day winning streak
Stocks closed lower on Wednesday as traders weighed a preliminary U.S.-China trade agreement and new
inflation data. The market’s recent run higher took a breather as major indexes ended the session near previous
closing levels. The S&P 500 lost 0.27% to end the day at 6,022.24, snapping a three-day win streak. The Nasdaq
Composite fell 0.5% to 19,615.88. The Dow Jones Industrial Average shed a mere 1.1 points, closing at
42,865.77. - Oil prices tick up on worries of escalating U.S.-Iran tension
Oil prices edged higher on Thursday to their highest in more than two months, after U.S. President Donald
Trump said U.S. personnel were being moved out of the Middle East, which raised fear that escalating tensions
with Iran could disrupt supply. Brent crude futures rose 15 cents, 0.2%, to $69.92 a barrel at 1230 am GMT,
while U.S. West Texas Intermediate crude 22 cents, 0.3%, to $68.37. Both Brent and WTI surged more than 4%
to their highest since early April on Wednesday. Trump on Wednesday said U.S. personnel were being moved
out of the Middle East because “it could be a dangerous place,” adding that the United States would not allow
Iran to have a nuclear weapon. Reuters reported earlier on Wednesday that the U.S. is preparing a partial
evacuation of its Iraqi embassy and will allow military dependents to leave locations around the Middle East
due to heightened security risks in the region, according to U.S. and Iraqi sources. Iraq is OPEC’s No. 2 crude
producer after Saudi Arabia. A U.S. official said military dependents could also leave Bahrain. Meanwhile, Iran’s
Minister of Defense Aziz Nasirzadeh said Tehran will strike U.S. bases in the region if nuclear talks fail and
conflict arises with Washington. Trump has repeatedly threatened Iran with bombing if it does not reach a new
nuclear deal. Optimism around a trade deal between the U.S. and China, which could boost energy demand in
the world’s two biggest economies, also buoyed oil prices. In the U.S., crude inventories fell by 3.6 million
barrels to 432.4 million barrels last week, the Energy Information Administration said. Analysts polled by
Reuters had expected a draw of 2 million barrels. - Gold climbs on rising Middle East tensions, weaker dollar
Gold prices rose on Thursday, bolstered by rising tensions in the Middle East and a weaker dollar, while softer
than-expected U.S. inflation data boosted expectations of Federal Reserve rate cuts. Spot gold was up 0.7% at
$3,375.06 an ounce, as of 0343 GMT. U.S. gold futures gained 1.5% to $3,395. The U.S. dollar index fell to a
near two-month low, making greenback-priced bullion more attractive to overseas buyers. The weakness in
the dollar index serves as a strong catalyst, said Kelvin Wong, a senior market analyst, Asia Pacific at OANDA,
adding that a “bullish breakout” of the $3,346 resistance triggered technical buying. Rising geopolitical risks
aided safe-haven assets, with President Donald Trump announcing on Wednesday that U.S. personnel were
being moved out of the Middle East due to heightened security risks amid rising tensions with Iran. Meanwhile,
U.S. consumer prices increased less than expected in May, driven by cheaper gasoline, though inflation could
accelerate due to import tariffs. The data prompted renewed calls from Trump for significant rate cuts. - U.S. envoy plans to meet Iran’s foreign minister on Sunday, U.S. official says
U.S. Special Envoy Steve Witkoff plans to meet Iranian Foreign Minister Abbas Araghchi in Oman on Sunday
and discuss Iran’s response to a recent American proposal for a nuclear deal, a U.S. official said late on
Wednesday. Iran said on Monday it will soon hand a counter-proposal for a nuclear deal to the United States
in response to a U.S. offer that Tehran deems “unacceptable,” while U.S. President Donald Trump said talks
would continue. Trump told a podcast on Monday he was less confident that Iran will agree to stop uranium
enrichment in a nuclear deal with Washington. Trump has been seeking a new nuclear deal to place limits
on Iran’s disputed uranium enrichment activities and has threatened the Islamic Republic with bombing if no
agreement is reached. Iran has long said it has no plans to develop nuclear weapons and is only interested in
atomic power generation and other peaceful projects. During his first White House term, Trump withdrew the
U.S. from a 2015 deal between Iran and world powers that placed limits on Tehran’s uranium enrichment drive
in exchange for relief from international sanctions. Uneasy relations between Iran and the U.S. go back
decades. Tehran says Washington has interfered in its affairs, citing events ranging from a 1953 coup against a
prime minister to the 2020 killing of its military commander in a U.S. drone strike. - U.S. inflation rises 0.1% in May from prior month, less than expected
Consumer prices rose less than expected in May as President Donald Trump’s tariffs had yet to show significant
impact on inflation, the Bureau of Labor Statistics reported Wednesday. The consumer price index, a broad
based measure of goods and services across the sprawling U.S. economy, increased 0.1% for the month, putting
the annual inflation rate at 2.4%. Economists surveyed by Dow Jones had been looking for respective readings
of 0.2% and 2.4%. Excluding food and energy, core CPI came in respectively at 0.1% and 2.8%, compared to
forecasts for 0.3% and 2.9%. Federal Reserve officials consider core a better measure of long-term trends, with
several expressing concerns recently over the impact that tariffs would have on inflation. - Tesla gains as Musk says he regrets some Trump-related posts
Tech billionaire Elon Musk said Wednesday that he regretted some social media posts he made last week during
a public dispute with U.S. President Donald Trump. “I regret some of my posts about President
@realDonaldTrump last week. They went too far,” Musk wrote on the X social media platform. The
disagreement ended what had been a close alliance between the two figures. The public falling out raised
market concerns about potential impacts on Musk’s businesses, including Tesla (NASDAQ:TSLA) and SpaceX.
Tesla shares rose 1.7% in pre-market trading following Musk’s latest post. - Shares of Goldman Sachs advanced 1.5% after Bank of America highlighted a rosy outlook for the
investment bank
Analyst Ebrahim Poonawala considered Goldman Sachs a strong candidate for a secular re-rating given the
ongoing shift to a structurally higher ROE, its ability to deliver superior and durable EPS growth, and its better
than-perceived resiliency in capital markets. The analyst said a sea change in the macro backdrop (interest
rates, geopolitics) compared to post-GFC years, combined with a strategy focused on deepening client
relationships (via financing), has increased the resiliency of trading revenues. Despite the inherent
unpredictability, trading revenues have grown in six out of the last seven years, bottoming out in 2017
(coinciding with a shift in Fed policy), Poonawala noted. The analyst said that the Asset & Wealth business
(~25% to EPS) should deliver 25%+ ROE driven by fundraising momentum, upside on fee rate, and operating
leverage from fund deployment. Poonawala noted Goldman Sachs as a significant beneficiary from a shift
towards a balanced regulatory backdrop, which has the potential to lower the CET1 capital requirement
(potentially by 100-200bp) and boost ROE by 150-270bp. - Starbucks Corp. gained 4.3% as its CEO claims there is “a lot of interest” in the potential sale of a stake in
its China business
Starbucks is searching for a partner interested in expanding the chain from around 8,000 to 20,000 stores in
China, CEO Brian Niccol told the Financial Times. Starbucks in no rush to close a deal and aims to have a
“meaningful stake” in the operation, the CEO added. A mix of Chinese and global private equity companies and
strategic investors had looked at buying a stake, the FT cited people familiar with the matter as saying. - Oracle Corp. projected cloud infrastructure sales will jump more than 70% in the fiscal year that began
this month. Shares rose 7.6% afterhours after the report
Chief Executive Officer Safra Catz said that Oracle is on its way to becoming “one of the world’s largest cloud
infrastructure companies.” The past year “was a very good year, but we believe FY26 will be even better as our
revenue growth rates will be dramatically higher,” she said. The company said remaining performance
obligations — watched as a measure of bookings — were $138 billion in the period that ended May 31,
compared with $130 billion in the previous quarter. “We recently got an order that said we’ll take all the
capacity you have, wherever it is,” Oracle Chairman Larry Ellison said. “This could be in Europe, it could be in
Asia, we’ll just take everything. I mean, we never got an order like that before.” The most “exceptional” part
of the report was Catz’s long-term outlook, which suggests revenue acceleration, Brent Thill, an analyst at
Jefferies, said. Bookings growth may come from work with OpenAI and Stargate, he said. On the call, Oracle
executives said the Stargate project is still in the early stages and not fully reflected in the financial outlook. “If
Stargate turns out to be everything as advertised, then we’ve understated our RPO growth,” Ellison said. In the
fiscal fourth quarter, sales increased 11% to $15.9 billion. Analysts, on average, projected $15.6 billion. Profit,
excluding some items, was $1.70 a share, compared with the average estimate of $1.64. Total cloud sales
increased 27% to $6.7 billion, in line with estimates. Revenue from the cloud infrastructure unit expanded 52%
to $3 billion, just falling short of Wall Street projections. The slightly miss in quarterly cloud revenue was likely
driven by supply constraints rather than a lack of demand, wrote Anurag Rana, an analyst at Bloomberg
Intelligence. - Bayer shares rose 4.1% after HSBC and Kepler Cheuvreux upgraded the German pharmaceutical and
chemicals company to buy from hold
HSBC analysts led by Rajesh Kumar say they are pivoting to a bull case and see a turnaround as closer now. Say
the Roundup litigation strategy of “glyphosate business separation, with a potential path for J&J-style
bankruptcy, Supreme Court route, and state litigations” sets up a clearer path. Says de-gearing the balance
sheet would be the next step once the litigation overhang is cleared and would enable investment in pharma
pipeline, setting it back on “a path to growth”. Kepler Cheuvreux analyst Christian Faitz says, “all of Bayer’s
operational problems and a good chunk of the worst-case scenario on the litigation front are priced into shares”
and investors should take a look at the stock. - Victoria’s Secret Sales Rise But Guidance Falls Shy of Street Estimates
The Company reported net sales of $1.353 billion for the first quarter of 2025, total comparable sales for the
first quarter of 2025 decreased 1%. The Company reported operating income for the first quarter of 2025 of
$20 million compared to $26 million in the first quarter of 2024. The Company reported a net loss of $2 million,
or $0.02 per diluted share, for the first quarter of 2025 compared to a net loss of $4 million, or $0.05 per diluted
share, for the first quarter of 2024. “I am proud of the team and their commitment to adapting and remaining
flexible in this challenging and fast-changing environment. We focused on proactively managing the business
ensuring we are remaining nimble and protecting investments in what matters most—the customer
experience, brand health and product innovation. I am pleased with the strength the business demonstrated
during the March and April timeframe, which included continued momentum in our powerhouse Beauty
business, ongoing strength in PINK apparel, and newness in sport and swim as we reclaim our position as a full
lifestyle brand,” said VS&Co CEO Hillary Super. VS&Co CFO Scott Sekella added, “We remained disciplined on
the fundamentals and execution in the quarter driving sales and operating income results that exceeded our
expectations. Though we recognize the macro environment is uncertain, we will continue to be disciplined in
controlling costs and will remain agile, reading and reacting to what the customer is telling us to ensure we are
building upon our solid foundation and realizing the full potential of our globally recognized brands.” Super
concluded, “As we look forward, we continue to be optimistic about our future, our opportunity to further
differentiate and elevate the brands with compelling storytelling and make even deeper emotional connections
with our customers.” - Chewy (NYSE:CHWY) Reports Q1 Earnings With US$3M Sales and Flat EPS
Chewy recently reported earnings results showing increased sales to USD 3.1 million, but a slight decline in net
income, which could have influenced its 38% price rise over the last quarter. During this time, executive
transitions, such as CFO David Reeder’s departure, and an extended credit agreement provided broader
strategic context. The market backdrop of easing trade tensions and positive economic signals likely supported
this upward trend. The backdrop of strong market conditions may have outweighed any reservations arising
from Chewy’s static earnings per share, indicating that broader market optimism played a critical role in the
company’s share price movement. The recent developments at Chewy, including a significant executive
transition and a new credit agreement, are expected to influence its growth strategy by potentially enhancing
financial flexibility and operational focus. These shifts, alongside the easing trade tensions and positive
economic signals, might have contributed to the company’s impressive 38% share price rise last quarter. Long
term shareholders have seen substantial gains, with a total return of 100.39% over the past year, indicating a
robust recovery in its stock despite earnings challenges.
