Despite a tentative trade deal with China earlier this week, Trump's warning underscores how fragile global economic diplomacy remains. Markets have not forgotten the turbulence of his previous term, and the prospect of renewed tariff threats is enough to inject fresh uncertainty into an already cautious investment environment.

Add to that the tragic crash of a Boeing 787 operated by Air India and a murky geopolitical picture - especially with renewed threats involving Iran - and the stage is set for broad risk aversion. Boeing shares were hit hard premarket, falling over 7%, dragging on the Dow. Energy prices also softened as investors reassessed global demand amid simmering regional instability.

Just like yesterday’s softer-than-expected CPI report, today’s Producer Price Index (PPI) figures also came in below expectations this morning, reinforcing signs of easing inflationary pressures. U.S. producer prices rose just 0.1% month-over-month in May, missing the consensus forecast of a 0.2% increase. On a year-over-year basis, PPI rose 2.6%, in line with estimates. Meanwhile, weekly jobless claims climbed to 248,000, slightly above the expected 242,000, suggesting some softening in the labor market alongside the cooling inflation trend.

Yesterday, CPI data came in lower than expected, and a preliminary agreement was reached with China. Yet, just like that, no one was pleased. The trading session brushed aside the positive news, instead concentrating on the challenges ahead to keep the global economy from veering off course. 

In these markets, which overemphasize short-termism and revel in volatility, I am always surprised to see that good news sometimes falls flat. Yesterday, the global stock market was treated to an official easing of trade tensions between China and the US AND lower-than-expected US inflation in May. On paper, these two events were supposed to be positive developments for two of the main issues currently facing us: fears about international trade and the future of US monetary policy.

Not to mention a sort of reconciliation between a magnanimous Donald Trump and a pitiful Elon Musk. And yet, at the end of the day, almost all stock market indices closed in the red. Even Wall Street, where the S&P 500 fell modestly (-0.3%), but fell nonetheless. And now you're going to tell me: investors had anticipated this. It's true that with a 25% rise in two months, the US stock market has made a strong comeback and is even showing gains in 2025. Few would have bet on that on the evening of April 7, Donald Trump's ill-named "Liberation Day," which at the time mainly liberated capital losses and a big global mess.

But the US president's successive backtracking has swelled the ranks of buyers betting on a rebound, rallying the entire market, which was too terrified at the idea of missing out on the upturn. Still, a 25% rise in two months is a little dizzying, especially since economic fears have not been dispelled and the political environment remains turbulent.

The X factor, Donald Trump himself, threw another spanner in the works yesterday by warning that he would be sending individual letters to the US's trading "partners" within the next fortnight, specifying the customs duties that will apply to them on July 9 if there is no change in the situation by then. This is a kind of old-fashioned punitive direct marketing. The tactic is now well known, but it continues to unsettle the financial world.

At the same time, oil prices have skyrocketed as tensions rise again in the Middle East. Reuters reported that the US was preparing to partially evacuate its embassy in Iraq for security reasons, while Iran threatened to strike US bases in the Middle East if nuclear talks failed and the US opted for bombing Iran. Brent crude hit $80 a barrel for the first time in more than two months. These were the two sources of tension that dominated the night.

The euro once again broke through the USD 1.15 mark after US Commerce Secretary Howard Lutnick said that the trade agreement with the EU would probably be one of the last to be concluded.

In fairly sparse corporate news as the end of the half-year approaches, Oracle impressed investors with its results, while Gitlab disappointed them. In Asia-Pacific this morning, a moderate decline prevailed, particularly in Japan, India, Australia, and Hong Kong. South Korea managed to stay up 0.4%, even though leading indicators in the US and Europe are pointing downwards.

Today's economic highlights:

  • Dollar index: 97,650
  • Gold: US$3,382
  • Crude Oil (BRENT): $68.70 (WTI) $66.15
  • United States 10 years: 4.42%
  • BITCOIN: $107,308

In corporate news:

  • Oracle surpassed quarterly revenue estimates due to strong cloud growth and AI adoption.
  • Bunge is nearing a decision from Chinese regulators on its proposed $8.2 billion acquisition of Viterra.
  • General Mills is considering selling its Haagen-Dazs stores in China for several hundred million dollars.
  • AIM ImmunoTech Inc. has announced a 1-for-100 reverse stock split.
  • OpenAI is in discussions to raise $40 billion with investors from Saudi Arabia, India, and the UAE, while also planning a $17 billion raise in 2027.
  • Walt Disney and Universal (Comcast) are suing image creator Midjourney for copyright infringement.
  • Starbucks is considering selling a minority stake in its Chinese subsidiary.
  • Dana is selling a division to Allison Transmission for $2.7 billion.

Analyst Recommendations:

  • Americold Realty Trust, Inc.: BNP Paribas Exane downgrades to neutral from outperform with a target price reduced from USD 22 to USD 18.
  • Datadog, Inc.: Wolfe Research upgrades to outperform from peerperform with a target price of USD 150.
  • Lineage, Inc.: BNP Paribas Exane downgrades to underperform from neutral with a price target reduced from USD 53 to USD 42.
  • Alexandria Real Estate Equities, Inc.: Baird maintains its outperform rating and reduces the target price from USD 129 to USD 102.
  • Chewy, Inc.: JP Morgan maintains its overweight recommendation and raises the target price from 36 to USD 47.
  • Elf Beauty: Jefferies maintains its buy recommendation and raises the target price from USD 115 to USD 150.
  • Marvell Technology Group Ltd: Arete Research maintains its buy recommendation and reduces the target price from USD 131 to USD 95.
  • Microchip Technology, Inc.: Evercore ISI maintains its outperform recommendation and raises the target price from USD 69 to USD 83.
  • On Semiconductor Corporation: Evercore ISI maintains its outperform recommendation and raises the target price from USD 47 to USD 72.
  • Oracle Corporation: Piper Sandler & Co maintains a neutral recommendation with a price target raised from USD 130 to USD 190.
  • Talen Energy Corporation: Morgan Stanley maintains its overweight rating and raises the target price from USD 243 to USD 300.
  • United Airlines Holdings, Inc.: Jefferies maintains its buy recommendation and raises the target price from USD 80 to USD 100.
  • Wingstop Inc.: Raymond James maintains its outperform rating and raises the target price from USD 310 to USD 425.