- Asian shares post modest gain, dollar holds drop
Asian shares edged up at the open as investors awaited news on trade negotiations between the US and China
before taking on risky bets. A regional stock index climbed 0.4 per cent while equity-index futures for the US
dipped 0.2 per cent. Shares in mainland China fluctuated at the open on their return from a holiday Monday
(June 2). Hong Kong shares advanced, erasing yesterday’s losses. Treasuries were steady in Asian trading on
Tuesday and the dollar was little changed after hitting its lowest since 2023 in the last session. Oil extended its
gains. - S&P 500 posts modest gain to start June as investors shrug off global trade tensions
Stocks rose on Monday, the first trading day of June, as Wall Street shook off increasing tensions in global
trade. The S&P 500 climbed 0.41% to close at 5,935.94, while the Nasdaq Composite advanced 0.67% and
ended at 19,242.61. The Dow Jones Industrial Average added 35.41 points, or 0.08%, settling at 42,305.48.
China pushed back against U.S. accusations that it had violated a temporary trade agreement. Instead, the
country blamed Washington for failing to uphold the deal — a sign that negotiations between the world’s two
largest economies are deteriorating. - Oil rises on Iran, Russia and Canada supply concerns
Oil prices rose in early Asia trade on Tuesday on concerns about supply, with Iran set to reject a U.S. nuclear
deal proposal that would be key to easing sanctions on the major oil producer, and with production in Canada
hit by wildfires. Brent crude futures gained 55 cents, or 0.85%, to $65.18 a barrel by 0000 GMT. U.S. West Texas
Intermediate crude was up 59 cents, or 0.94%, to $63.11 a barrel, after rising around 1% earlier in the session.
Both contracts gained nearly 3% in the previous session after OPEC+ agreed to keep output increases in July at
411,000 barrels per day, which was less than some in the market had feared and the same hike as in the
previous two months. Geopolitical tensions supported prices on Tuesday. Iran was poised to reject a U.S.
proposal to end a decades-old nuclear dispute, an Iranian diplomat said on Monday, saying it fails to address
Tehran’s interests or soften Washington’s stance on uranium enrichment. If nuclear talks between the U.S. and
Iran fail, it could mean continued sanctions on Iran, which would limit Iranian supply and be supportive
of oil prices. The ongoing conflict between Russia and Ukraine continued to stoke supply concerns and
geopolitical risk premiums. Adding to supply worries, a wildfire in the province of Alberta in Canada has
prompted a temporary shutdown of some oil and gas production, which could reduce supply. According to
Reuters calculations, wildfires in Canada have affected more than 344,000 bpd of oil sands production, or
about 7% of the country’s overall crude oil output. The big jump in oil prices on Monday mostly reflected relief
that the Organization of the Petroleum Exporting Countries and allies, including Russia, did not go ahead with
a larger production hike than in the previous two months. - Gold retreats from near four-week peak as dollar ticks up
Gold prices fell on Tuesday, retreating from near a four-week high, as a modest rise in the dollar weighed on
the metal, although uncertainty over the U.S.-China trade agreement kept investors cautious and limited the
bullion’s decline. Spot gold fell 0.3% to $3,369.98 an ounce, as of 0249 GMT, after hitting its highest level since
May 8 earlier in the session. U.S. gold futures were steady at $3,390. The metal gained about 2.7% in the
previous session, marking its strongest daily performance in more than three weeks. “Dollar recovered slightly
and gold came down so it has been inversely correlated at this point of time,” said Brian Lan, managing director
at GoldSilver Central, Singapore. However, gold is still closely tracking developments around global trade, and
while investors have slightly reduced their positions in gold it is not to the extent seen in previous instances
when tensions appeared to ease, said Lan. The U.S. dollar index recovered slightly from a six-week low.
Elsewhere, spot silver fell 2.1% to $34.07 an ounce, platinum was steady at $1,062.46 and palladium was up
0.1% at $990.26. - China’s May factory activity unexpectedly shrinks as tariffs dent sentiment — worst drop since 2022
China’s manufacturing activity in May shrank at its fastest pace since September 2022, a private survey
showed Tuesday, as a sharper decline in new export orders highlighted the impact of prohibitive U.S. tariffs.
The Caixin/S&P Global manufacturing purchasing managers’ index came in at 48.3, missing Reuters’ median
estimate of 50.6 and dropping sharply from 50.4 in April. It fell below 50, the mark that separates growth from
contraction, for the first time since September last year. The decline in foreign demand accelerated in May,
with the gauge for new export orders falling to its lowest level since July 2023, Caixin said. Total new orders,
an indicator of overall demand, also contracted for the first time in eight months. The job market remained
grim, with employment shrinking for the second straight month and at the fastest clip since January, according
to the survey. Notably, the factories’ finished goods inventory accumulated for the first time in four months
due to falling sales and delays in outbound shipments, the survey showed. - South Korea’s opposition party chief Lee Jae-myung leads presidential race, opinion poll shows
South Korea’s opposition party leader Lee Jae-myung is projected to win the country’s snap presidential
election on Wednesday, according to a Gallup poll cited by Yonhap. An electoral win for the Democratic Party
candidate would set him up to be the country’s next leader after ousted president Yoon Suk Yeol, and
determine the trajectory of South Korea’s trade negotiations with the U.S., and policies on China and North
Korea. Yoon was impeached after his short-lived declaration of martial law last December, and was removed
from office by the country’s Constitutional Court in April. This triggered the snap presidential election. Lee,
who lost to Yoon by a razor-thin margin in the 2022 presidential election, currently holds a sizable lead in
opinion polling. The Gallup poll reportedly showed that 49% of respondents were in favor of the liberal
candidate becoming president. This compares with the 35% garnered by his closest rival, Kim Moon Soo of the
conservative People’s Power Party, which the former president Yoon was from. Lee’s eligibility for the
presidency was in doubt after he was charged with breaching election laws, but a final ruling on the case
had been postponed until after the election by South Korea’s High Court. This view is echoed by firms such as
the Eurasia Group, which said in a May 27 note that Lee is the “clear favorite” to win the election, putting his
odds of victory at 80%. Eurasia said that while Lee had shifted his stance to the political center in a bid to attract
independent and centrist votes, he is likely to pursue a more left-leaning agenda in office. - White House ‘close to the finish line’ on some trade deals, says Treasury official
Deputy Treasury Secretary Michael Faulkender said he expects “a lot more deals” could be announced before
President Donald Trump’s 90-day tariff pause expires. “We want to see that we reach at least terms of an
agreement prior to the expiration of that pause,” Faulkender said. Stock futures fell Monday amid renewed
trade tensions between the U.S. and China. - Snowflake to buy database startup Crunchy Data for about $250 million
Data analytics software maker Snowflake said Monday it has agreed to buy Crunchy Data, a startup that offers
cloud-based database software. Snowflake will pay about $250 million, according to a person familiar with the
matter who was not authorized to speak publicly about the deal. Crunchy Data sells access to a cloud-hosted
version of the PostgreSQL open-source database, which replaced MySQL as the most popular database in Stack
Overflow’s annual developer survey in 2023. Crunchy Data’s service includes security and performance
enhancements in comparison with the standard open-source code. Snowflake rival Databricks last month
announced its intent to acquire Neon, whose software is also based on PostgreSQL, for around $1 billion.
Snowflake also looked at buying Neon last year but walked away, according to a different person who added
that Crunchy Data generates over $30 million in annualized revenue. Neon did not immediately respond to a
request for comment. Both Databricks and Snowflake are counting on their respective deals to help them
benefit from corporate spending to deliver artificial intelligence agents that carry out tasks on their own. - Tesla’s new-vehicle registrations fell further in France, undercutting Chief Executive Officer Elon Musk’s
assertion last month that the carmaker has recovered from its early-year sales slump
The automaker sold only 721 cars in May, down 67% from a year earlier, according to French industry
association Plateforme Automobile. Tesla’s registrations were the lowest since July 2022, despite the company
rolling out a redesigned version of its most popular vehicle, the Model Y. Tesla shares fell 1.1%. Musk recently
denied the need for a plan to improve Tesla’s fortunes, telling Bloomberg News in a May 20 interview that the
company had “already turned around.” While the CEO claimed Tesla was seeing sales decline along with every
other carmaker in Europe, manufacturers including Volkswagen AG, Renault SA and BMW AG increased
deliveries in the first four months of the year. Tesla’s sales have fallen 47% through May in France, the second
biggest market for electric vehicles in the European Union. The Federal Motor Transport Authority in Germany,
the EU’s largest EV market, is scheduled to release May figures on June 6. - Shares in US steel and aluminum stocks soared Monday after President Donald Trump said he would be
increasing tariffs on steel and aluminum to 50% from 25%
Tariffs are expected to raise the price of US-made steel, which should benefit Cleveland Cliffs, Steel Dynamics,
and Nucor. Meanwhile, BMO Capital Markets analyst Katja Jancic upgraded Nucor to outperform from market
perform. “Nucor is executing on a multi-year organic growth plan that should over time support higher
throughcycle profitability and FCF”. PT set to $145. - Shares of DraftKings fell 6% on Monday after Illinois lawmakers proposed a sports betting tax increase
in the fiscal 2026 budget
This was surprise move from Illinois, following last year’s unexpected boost, according to analysts at Truist and
Oppenheimer. Online sports betting operators will have to pay a 25c levy on the first 20 million wagers
accepted, and 50c thereafter, they say. Truists Barry Jonas thinks it is likely that the governor will sign this into
law, with the new tax effective July 1. Oppenheimer’s Jed Kelly writes that this would “essentially” put an
effective tax rate of ~50% on category leaders DKNG and FLUT’s FanDuel. That said, Kelly views Illinois as an
“outlier, and not a sign of further tax contagion”; notes that the state’s “blue trifecta, political
relationship/donor structure with Gov. Pritzker and the state’s fiscal policy, creates a more difficult
environment for mobile gaming operators” compared with other states. - Microsoft trims hundreds more jobs amid AI-focused restructuring – Bloomberg
Microsoft Corp (NASDAQ:MSFT). has made further job cuts, according to Bloomberg, laying off hundreds of
employees just weeks after its largest workforce reduction in recent years. This move highlights the tech
industry’s ongoing endeavor to manage costs while investing billions into artificial intelligence (AI). On Monday,
over 300 employees were notified that their roles had been terminated, as per a notice examined by
Bloomberg. This reduction is in addition to the 6,000 layoffs announced by Microsoft last month. A
spokesperson for Microsoft confirmed the recent job cuts, explaining that these are part of the company’s
ongoing organizational changes aimed at positioning the firm for success in a rapidly evolving marketplace. The
surge in AI has significantly impacted the tech labor market, as companies are increasingly focusing on AI
centric roles and utilizing this technology for cost-saving purposes. - Disney laying off several hundred in film, TV, finance
Media company Walt Disney (NYSE:DIS) is laying off several hundred employees in film, television and
corporate finance, a source familiar with the matter said on Monday. The layoffs affect multiple teams around
the world, including film and TV marketing, TV publicity and casting and development, the source said. Disney
and other companies are reshaping their business strategies in response to the migration of cable TV audiences
to streaming platforms. In 2023, Disney cut 7,000 jobs as part of an effort to save $5.5 billion in costs. Disney
also laid off nearly 6%, or fewer than 200 people, in the ABC News Group and Disney Entertainment Networks
in March. - TSMC says tariffs have some impact but AI demand robust
Taiwan’s TSMC said on Tuesday that U.S. tariffs are having some impact on the company but demand for
artificial intelligence (AI) remains strong and continues to outpace supply.U.S. President Donald Trump’s trade
policies have created much uncertainty for the global chip industry and TSMC, the top producer of the world’s
most advanced semiconductors whose customers include Apple (NASDAQ:AAPL) and Nvidia (NASDAQ:NVDA).
Chief Executive C.C. Wei, speaking at the company’s annual shareholders meeting in the northern Taiwanese
city of Hsinchu, said they have not seen any changes in customer behaviour due to tariff uncertainty and the
situation may become clearer in coming months. “Tariffs do have some impact on TSMC, but not directly. That’s
because tariffs are imposed on importers, not exporters. TSMC is an exporter. However, tariffs can lead to
slightly higher prices, and when prices go up, demand may go down,” he said. “If demand drops, TSMC’s
business could be affected. But I can assure you that AI demand has always been very strong and it’s
consistently outpacing supply.” In April, the company, the world’s largest contract chipmaker, gave a bullish
outlook for the year on robust demand for AI applications. In a sign of the strength of demand, Wei said TSMC’s
job is to provide its customers “with enough chips, and we’re working hard on that. ’Working hard’ means it’s
still not enough.”
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