Stock Market Rises Amid U.S.-China Trade Negotiations
Market news 11 JUN
On Tuesday, the U.S. stock market continued its upward movement, supported by positive expectations from the ongoing trade negotiations between the U.S. and China. The S&P 500 and Nasdaq indices rose by 0.6%, the Dow Jones added 0.3%, reaching a three-month high, while the S&P 500 and Nasdaq hit 3.5-month highs. Investors responded positively to comments from the U.S. Secretary of Commerce, who noted good progress in talks between the two countries.
External Factors
The market’s growth was somewhat restrained after the World Bank lowered its 2025 global GDP forecast to 2.3% from the previous 2.7%. Nevertheless, overall market sentiment remained positive. In addition, U.S. Treasury yields showed little change due to weak demand during the $58 billion auction of 3-year bonds.
Leading Sectors and Key Stocks
The energy sector led the gains with a 1.8% increase, despite WTI crude oil prices slipping slightly to $64.96 per barrel. The consumer discretionary sector followed with a 1.2% gain, boosted by Tesla shares, which jumped 5.7% to $326.09.
The technology sector grew by 0.5%, but semiconductor manufacturers drove the strongest momentum. The PHLX Semiconductor Index rose by 2.1%, largely thanks to Intel shares, which surged 8% amid optimism over its new technologies. Other notable gainers included KLA Corp (+3%), Lam Research (+3%), ON Semiconductor, Micron, Qualcomm, and others, with gains ranging from 1% to 3%.
Corporate News Highlights
Several companies stood out due to corporate developments:
TSMC: May revenue jumped 39.6% year-over-year due to strong AI chip demand. Year-to-date revenue rose 42.6%, and analysts expect Q2 sales to grow by 50.3% year-over-year.
Morgan Stanley: Raised over $5 billion in debt financing for Elon Musk’s xAI project.
AT&T: Reaffirmed its 2025 forecast and announced a $10 billion share buyback program.
Novo Nordisk: Shares rose as activist fund Parvus Asset Management increased its stake.
Merck: Received FDA approval for a new RSV vaccine for infants.
Meta Platforms: Formed a new "superintelligence" AI team led by CEO Mark Zuckerberg.
Uber: Announced the acquisition of Crown Taxi to expand operations in Taiwan.
Individual Stock Movements
Several companies showed significant price movements:
Insmed Inc: +28% after positive clinical trial results.
Casey’s General Stores: +11% following strong earnings.
Eagle Bancorp and Atlantic Union Bankshares: Gained after analyst upgrades.
JM Smucker: -15% after disappointing profit forecasts.
Gilead Sciences: -2% after the FDA halted clinical trials.
McDonald’s: -1% after Redburn downgraded the stock.
Mullen Automotive: +7% in premarket after settling a legal dispute with GEM Group.
International Markets
Overseas markets showed mixed performance: Euro Stoxx 50 fell by 0.11%, China’s Shanghai Composite declined 0.44%, while Japan’s Nikkei gained 0.32%, reaching a 3.5-month high.
Bonds and Interest Rates
The 10-year U.S. Treasury closed slightly higher, with its yield falling by 0.2 basis points to 4.472%. European government bonds also saw lower yields: German 10-year bonds dropped by 4.4 basis points, and UK 10-year bonds decreased by 9 basis points. ECB's Holzmann stated that while inflation targets have been met, it may be prudent to delay rate cuts until the fall to avoid reigniting inflationary pressures.
Macroeconomic Data and Expectations
Throughout the week, investors will closely monitor key U.S. economic reports:
May CPI is expected to rise to 2.5% year-over-year.
Weekly initial jobless claims are forecasted to decline.
The University of Michigan consumer sentiment index is projected to increase.
Producer Price Index (PPI) is expected to climb to 2.6% year-over-year.
Currently, markets are not pricing in any chance of a Federal Reserve rate cut at the June FOMC meeting.