Stocks

Key Points

• Initial jobless claims remained at 248,000 for the week ending June 7, unchanged from the prior week and above economists' expectations of 242,000.
• Continuing claims rose to 1.956 million, the highest since November 2021, indicating longer periods of unemployment for those out of work.
• Recent labor market data shows signs of cooling, with May nonfarm payrolls at 139,000, down from April, and private sector job growth at a two-year low.
• The slowing labor market and cooling inflation have increased speculation about potential Federal Reserve interest rate cuts, with a 25% chance by July.
• Analysts warn of potential policy mistakes by the Fed if inflation trends do not align with expectations, given the current economic uncertainty.

Summary

The latest Department of Labor data reveals a cooling US labor market, with initial jobless claims holding steady at 248,000 for the week ending June 7, surpassing economists' forecasts of 242,000. Continuing claims climbed to 1.956 million, the highest since November 2021, suggesting that unemployed individuals are struggling to find new jobs. This data aligns with other indicators of a slowing labor market, including May's nonfarm payrolls of 139,000, a decline from April, and the lowest private sector job growth in over two years at 37,000, per ADP data. Revisions also showed fewer jobs added in prior months than initially reported. Amidst cooling inflation, these labor trends have fueled discussions on Federal Reserve interest rate cuts, with traders now estimating a 25% chance of a cut by July, up from 19% previously. Economists like Neil Dutta from Renaissance Macro highlight rising continuing claims as a sign of increasing unemployment and declining hiring rates, even if layoffs remain stable. Dutta also cautions that the Fed's wait-and-see approach could lead to significant policy errors if inflation does not behave as anticipated, underscoring the high uncertainty in the current economic landscape.

Key Points

• Boeing stock (BA) dropped nearly 8% in premarket trading after an Air India Boeing 787-8 Dreamliner crashed near Ahmedabad airport, carrying 242 people.
• This is the first major crash involving a Boeing 787 Dreamliner since its introduction in 2011, with over 200 bodies recovered from the site.
• Boeing expressed support for Air India and extended thoughts to those affected by the tragedy.
• The crash adds to Boeing's challenges, despite a 20% year-to-date stock rise under new CEO Kelly Ortberg, following a tumultuous 2024 with safety and production issues.
• Shares of Boeing suppliers like GE Aerospace and Spirit AeroSystems also fell in premarket trading, by 4% and 3% respectively.

Summary

Boeing's stock (BA) fell nearly 8% in premarket trading after an Air India Boeing 787-8 Dreamliner crashed shortly after takeoff near Ahmedabad airport, carrying 242 people. The flight, headed to Gatwick Airport in London, marks the first major crash of a Dreamliner since its 2011 debut. Over 200 bodies have been recovered, with survival unclear. Boeing issued a statement supporting Air India and expressing condolences. This incident is a significant setback for Boeing, which has been recovering under new CEO Kelly Ortberg with a 20% year-to-date stock increase, despite a challenging 2024 following a "door plug" incident on an Alaska Airlines flight that led to lawsuits, investigations, and a leadership overhaul. The company also faced scrutiny after fatal 737 Max 8 crashes in 2018 and 2019, exposing software flaws and resulting in a global grounding. The Ahmedabad crash further impacts Boeing's reputation, with shares of suppliers like GE Aerospace and Spirit AeroSystems also declining in premarket trading by 4% and 3%, respectively.

Key Points

• Market Reaction to Trump's Posts: President Trump's social media posts about trade deals, such as the recent one on a China deal, no longer significantly impact markets as they did a month ago.**
• Shift in Market Focus: Investors are now more focused on economic data and Federal Reserve actions, rather than trade policy updates, with a cooler-than-expected May consumer price index boosting expectations for interest rate cuts.**
• Trade Policy Uncertainty: While trade policy uncertainty has decreased from its peak, tariffs remain a persistent factor, with effective rates around 15%, and strategists are not expecting a return to pre-tariff levels.**
• Economic Resilience: Despite ongoing tariffs, Wall Street remains optimistic about the US economy's resilience, shifting attention to the Fed's potential rate cuts based on cooling inflation and a stable labor market.**
• Fed's Role: Upcoming Federal Reserve decisions and Chair Jerome Powell's statements are anticipated to be critical in determining market direction, with hopes for rate cuts driven by positive economic indicators.**

Summary

This article from Yahoo Finance's Morning Brief highlights a significant shift in market dynamics, where President Trump's social media posts on trade deals, like the recent China agreement announcement, no longer sway markets as they did previously. On Wednesday, despite Trump's post, major index futures remained largely unaffected, with investor attention turning to economic data instead. A cooler-than-expected May consumer price index report fueled optimism for Federal Reserve rate cuts, possibly twice this year, signaling a move away from trade war dominance. Strategists note that while trade policy uncertainty has lessened, tariffs persist at around 15%, and markets are adapting to this reality by focusing on US economic resilience. The Federal Reserve's trajectory, alongside cooling inflation and a stable labor market, now takes center stage, with recession fears fading. Upcoming Fed decisions and Chair Jerome Powell's comments are poised to test market expectations for policy easing driven by positive economic trends rather than labor market distress.

Key Points

• US Orders Staff Departure: The US has ordered some embassy staff in Baghdad to leave and authorized families of military personnel to depart the region due to heightened security risks stemming from Iran's threats over its nuclear program.**
• Iran's Retaliation Warning: Iran has warned of striking US military bases in the Middle East if negotiations fail and it faces an attack, with Defense Minister Aziz Nasirzadeh emphasizing potential significant losses for the US.**
• Israel's Potential Action: Reports indicate Israel is prepared to launch an operation against Iran, contributing to the US decision to advise some Americans to leave the region.**
• Regional Tensions Impact: Increased tensions have led to warnings from the UK Navy about potential military escalation affecting shipping in key Middle Eastern waterways like the Strait of Hormuz.**
• Oil Market Reaction: West Texas Intermediate futures surged by up to 5.2% following reports of the US embassy's ordered departure amid escalating security concerns in the region.**

Summary

The US has ordered a partial evacuation of its embassy staff in Baghdad and authorized families of military personnel to leave the region due to escalating tensions with Iran over its nuclear program. Iran has threatened to target US military bases in the Middle East if negotiations collapse and it is attacked, with its Defense Minister warning of significant retaliatory losses for the US. Reports also suggest Israel is preparing for a potential operation against Iran, prompting the Trump administration to advise some Americans to depart. President Trump has expressed dwindling confidence in nuclear talks, while Iran is preparing a new proposal for discussions in Muscat. The heightened tensions have broader implications, with the UK Navy issuing warnings about potential military escalation impacting shipping through critical chokepoints like the Strait of Hormuz. Oil markets reacted sharply, with West Texas Intermediate futures rising over 5% amid security concerns. The situation remains fluid, with the US Central Command coordinating with allies to maintain readiness, as geopolitical strife continues to threaten stability in the region.

Key Points

• Oil prices declined on Thursday, with Brent crude down 0.4% to $69.47 a barrel and WTI down 0.3% to $67.92 a barrel, reversing earlier gains in Asian trading.
• Tensions between the U.S. and Iran, including U.S. personnel movements in the Middle East and upcoming nuclear talks, are contributing to market uncertainty and a geopolitical premium on oil prices.
• U.S. President Trump emphasized preventing Iran from acquiring nuclear weapons, while Iran maintains its nuclear activities are peaceful, with talks scheduled for Sunday in Oman.
• Analysts suggest the recent surge in oil prices above $70 per barrel was overdone, expecting a price pullback but a sustained premium until U.S.-Iran talks provide clarity.
• U.S. crude inventories dropped by 3.6 million barrels last week, exceeding expectations, which could influence future price movements.

Summary

Oil prices fell on Thursday, with Brent crude dropping 0.4% to $69.47 a barrel and WTI declining 0.3% to $67.92, reversing earlier gains in Asian trading. The decline follows a surge of over 4% the previous day, driven by heightened U.S.-Iran tensions and U.S. decisions to reposition personnel in the Middle East ahead of nuclear talks with Iran scheduled for Sunday in Oman. President Trump reiterated his stance against Iran acquiring nuclear weapons, while Iran insists its nuclear activities are peaceful. Analysts, including Vivek Dhar from Commonwealth Bank Australia, suggest the recent price spike above $70 was excessive, anticipating a pullback but a lingering geopolitical premium until talks clarify outcomes. The U.S. is also partially evacuating its Iraqi embassy and allowing military dependents to leave certain Middle Eastern locations due to security risks. Meanwhile, U.S. crude inventories fell by 3.6 million barrels last week, surpassing expectations. Market participants are cautious, with some betting on reduced tensions post-talks, though Trump’s skepticism about reaching a deal and Iran’s warnings of retaliation if provoked add uncertainty to the oil market outlook.

Key Points

• US-China Trade Talks Progress: The US and China have agreed on a preliminary framework to ease trade tensions, focusing on the flow of sensitive goods like rare earth minerals and magnets, following negotiations in London.**
• Rare Earths Resolution Expected: US negotiators are optimistic about resolving issues surrounding rare earth shipments, with potential reciprocal lifting of export restrictions once approvals are secured from both nations' leaders.**
• Broader Issues Addressed: Discussions also touched on other critical topics like fentanyl, with the US expecting significant progress from China, as part of broader efforts to stabilize economic relations.**
• Trust and Implementation Challenges: While progress has been made, trust remains a key issue, and the deal's success hinges on approval and enforcement by Presidents Trump and Xi, with no further meetings currently scheduled.**

Summary

The US and China have reached a preliminary agreement to reduce trade tensions, focusing on the flow of sensitive goods like rare earth minerals and magnets, following intense negotiations in London. This framework, built on prior talks in Geneva, aims to resolve disputes over critical mineral exports that recently threatened to derail their nascent trade truce. US officials, including Commerce Secretary Howard Lutnick, expressed optimism about settling rare earth issues and potentially lifting related export controls in a balanced manner. The talks, held over two days in a historic mansion near Buckingham Palace, also addressed broader concerns like fentanyl, a priority for the Trump administration. While both sides hope to rebuild trust during a 90-day tariff reprieve, challenges remain, as the deal awaits approval from Presidents Trump and Xi with no further meetings scheduled. China’s leverage in rare earths, vital for advanced manufacturing, underscores the strategic importance of this agreement, though experts caution that fundamental issues like chips versus rare earths persist. Market reactions were muted, reflecting cautious optimism about shifting from confrontation to coordination, though uncertainties linger over implementation.

Key Points

• Traders are increasingly betting on just one Federal Reserve interest rate cut this year due to resilient economic growth and persistent inflation.
• Swaps traders now anticipate only about 0.45 percentage points of easing by year-end, the lowest expectation since before Trump's tariffs in April.
• Strong May jobs data and cooling trade tensions, including US-China talks in London, have led traders to reduce expectations for rate cuts.
• Hedging activity in SOFR options shows a rise in hawkish bets, with some targeting no Fed policy moves in 2023.
• JPMorgan's Treasury client survey indicates a rise in investors' net long positions, the highest since May 5, reflecting shifting market sentiment.

Summary

Traders are scaling back expectations for Federal Reserve interest rate cuts in 2023, now anticipating just one cut due to strong economic growth and persistent inflation. Swaps traders have reduced their forecast for easing to about 0.45 percentage points by year-end, the lowest since before President Trump's tariffs in April disrupted markets. Strong May jobs data and signs of easing trade tensions, highlighted by recent US-China talks in London, have further diminished bets on aggressive rate reductions. The Fed is expected to maintain current rates at its upcoming meeting, with upcoming US consumer-price data for May likely to reinforce a cautious approach. In the options market, particularly with SOFR-linked instruments, there’s a notable increase in hawkish hedging, with some traders betting on no policy changes this year. Meanwhile, JPMorgan’s Treasury client survey shows investors increasing net long positions to the highest since early May, indicating evolving market dynamics. Activity in Treasury and SOFR options also reflects a cautious outlook, with traders paying premiums to hedge against potential selloffs and focusing on downside protection over the next 18 months.

Key Points

• May's Consumer Price Index (CPI) is expected to show a slight increase in headline inflation to 2.4% from 2.3% in April, with core CPI (excluding food and energy) rising to 2.9% from 2.8%.
• The CPI report, due Wednesday, comes amid scrutiny of President Trump's tariffs, with a 10% baseline duty for most countries and higher tariffs on China, Mexico, and Canada still in effect.
• Economists, including those at Wells Fargo and Goldman Sachs, anticipate modest inflation rises due to tariffs, with potential for stronger impacts in the coming months.
• Uncertainty around the timing and longevity of tariff policies may delay price increases, as firms adopt a cautious approach, according to BNP Paribas.
• Markets expect the Federal Reserve to maintain steady interest rates at its upcoming policy meeting despite inflation concerns.

Summary

May's Consumer Price Index (CPI) report, set for release on Wednesday, is anticipated to reflect a slight uptick in inflation, with headline inflation rising to 2.4% from 2.3% in April, and core CPI (excluding food and energy) increasing to 2.9% from 2.8%. This data comes under intense scrutiny as investors assess the impact of President Trump’s tariffs, implemented after his "Liberation Day" announcements. While many reciprocal tariffs have been paused, a 10% baseline duty remains for most countries, with higher rates on Chinese goods (around 30%) and specific tariffs on Mexico, Canada, steel, aluminum, and autos. Economists from Wells Fargo and Goldman Sachs predict a modest inflation rise due to higher goods prices, though significant jumps are not expected immediately. However, uncertainty persists regarding the timing and extent of tariff-induced price increases, with firms potentially delaying adjustments due to the unpredictable nature of tariff policies, as noted by BNP Paribas. Stronger inflation readings are projected for June and July, and ongoing tariff fluctuations complicate predictions, according to Atlanta Fed president Raphael Bostic. Despite these concerns, markets anticipate the Federal Reserve will hold interest rates steady at its next meeting.

Key Points

• IBM announced the development of Starling, the world's first large-scale, fault-tolerant quantum computer, set to launch by 2029.
• Starling will perform 20,000 more operations than current quantum computers and will be housed in IBM’s new quantum data center in upstate New York.
• The computer will use a new error correction code called qLDPC, allowing for efficient scaling with fewer qubits compared to competitors like Google’s surface code.
• IBM’s advancement is seen as a significant step in quantum computing, with industry experts predicting useful quantum computers within five years.
• Competitors such as Amazon, Google, and Microsoft are also making strides in quantum computing, intensifying the race in this burgeoning market.

Summary

IBM has unveiled plans to build Starling, the world’s first large-scale, fault-tolerant quantum computer, expected to launch by 2029. Set to be housed in a new quantum data center in upstate New York, Starling will perform 20,000 more operations than existing quantum systems and tackle complex tasks like drug discovery and financial risk analysis without the errors that currently hinder quantum technology. IBM’s innovation includes a new error correction code, qLDPC, which is more efficient than competitors’ methods, such as Google’s surface code, enabling better scalability with fewer qubits. This announcement follows a surge in IBM’s stock, which hit an all-time high, reflecting a 60% increase over the past year. Meanwhile, tech giants like Amazon, Google, and Microsoft are also advancing in the quantum computing space, with recent chip releases intensifying competition. Industry analysts view IBM’s development as a major milestone, with the quantum market projected to reach $8.6 billion by 2028. Experts suggest useful quantum computers could emerge within five years, despite earlier skepticism from figures like Nvidia’s CEO. IBM’s progress with Starling marks a pivotal shift from incremental breakthroughs to a comprehensive, scalable quantum system, potentially reshaping fields reliant on complex problem-solving.

Key Points

• US oil production is expected to increase in 2023 and 2024, with significant growth from the Gulf of Mexico, contributing 300,000 barrels of new daily output this year and 250,000 next year.
• The Gulf's resurgence contrasts with declining shale production due to falling crude prices, with major projects by Chevron, Shell, and BP driving output despite shale cutbacks.
• Innovations in offshore technology and cost reduction, such as simpler structures and tiebacks to existing platforms, have made Gulf projects more resilient to low oil prices.
• Challenges remain as the Gulf lacks major new discoveries since 2017, though technological advancements are unlocking difficult reserves like Chevron’s high-pressure Anchor field.
• Trump’s policies and the National Energy Dominance Council aim to boost US oil production, particularly in the Gulf, despite global trade and OPEC+ pressures impacting prices.

Summary

US oil production is set to grow in 2023 and 2024, driven unexpectedly by the Gulf of Mexico rather than shale, as crude prices decline. The Gulf, dubbed the "Gulf of America" by President Trump, will add 300,000 barrels of daily output this year and 250,000 next year, accounting for significant portions of US growth, according to Wood Mackenzie. This marks a revival for the region, previously overshadowed by shale booms and setbacks like the Deepwater Horizon spill. While shale drillers cut back due to low prices, major Gulf projects by Chevron, Shell, and BP are coming online, bolstered by cost-effective innovations like simpler designs and tiebacks to existing platforms. Chevron’s production is set to rise 50% by 2026, while Shell and BP plan significant expansions. Trump’s administration supports this growth through policies and a new National Energy Dominance Council, though global trade tensions and OPEC+ supply increases challenge price stability. Despite technological advances unlocking tough reserves, the Gulf faces limits with no major discoveries since 2017, raising questions about long-term sustainability.

Key Points

• Wall Street strategists remain optimistic about stock performance, maintaining S&P 500 year-end targets between 6,300 and 6,500, despite signs of a cooling labor market and economic slowdown.
• Morgan Stanley's Mike Wilson suggests that a moderate growth slowdown is already priced into the market, with stocks often moving ahead of lagging economic data.
• Goldman Sachs' David Kostin notes that S&P 500 returns correlate more with soft economic data (like consumer surveys) than hard data (like jobs reports), projecting a target of 6,500.
• Citi's Scott Chronert raised the S&P 500 target to 6,300, citing reduced tariff uncertainty and stabilizing economic growth forecasts, with a preference for growth stocks like Big Tech.

Summary

Wall Street strategists are maintaining a bullish outlook on stocks despite indications of a cooling labor market and slowing economic activity. Firms like Morgan Stanley, Goldman Sachs, and Citi have set S&P 500 year-end targets between 6,300 and 6,500, with the index recently trading near 6,010. Morgan Stanley's Mike Wilson argues that a moderate growth slowdown is already reflected in stock prices, while Goldman Sachs' David Kostin highlights that S&P 500 returns align more with soft data (e.g., consumer surveys) than hard data (e.g., jobs reports), predicting sustained equity gains if soft data recovery continues. Citi's Scott Chronert recently raised his target to 6,300, pointing to easing tariff concerns and stabilizing growth forecasts, favoring growth stocks like Big Tech amid high valuations and interest rates. Despite weaker economic indicators—such as low job additions in May and rising unemployment claims—strategists believe the worst fears, including tariff-driven inflation, may be behind us. However, they caution that a sharper-than-expected economic slowdown remains a key risk.

Key Points

• US-China Trade Talks Progress: Trade negotiations between the US and China continued for a second day in London, focusing on easing tensions over technology and rare earth shipments after a productive first day of over six hours.**
• Key Delegates Involved: The US delegation was led by Treasury Secretary Scott Bessent, Commerce Secretary Howard Lutnick, and US Trade Representative Jamieson Greer, while China was represented by Vice Premier He Lifeng and Commerce Minister Wang Wentao.**
• Potential Concessions: The US signaled willingness to lift some tech export restrictions in exchange for China easing limits on rare earth shipments, critical for energy, defense, and tech products, though high-end Nvidia AI chips remain restricted.**
• Mixed Signals on Outcomes: While US officials expressed optimism, with comments like “fruitful” discussions, President Trump remained noncommittal on lifting export curbs, and Chinese state media emphasized a principled stance.**

Summary

Trade talks between the US and China resumed in London, marking a second day of negotiations aimed at reducing tensions over technology and rare earth shipments. The discussions, held at Lancaster House, followed a six-hour session on the first day and involve key figures like US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. The US hinted at easing some tech export controls in exchange for China relaxing restrictions on rare earths, vital for industries like defense and energy, though advanced Nvidia AI chips remain off the table. While US officials described the talks as “fruitful,” President Trump was noncommittal, and Chinese state media stressed a firm stance. These negotiations, the first since a Geneva truce, seek to address a persistent trade imbalance amid economic strain on both sides, evidenced by declining Chinese exports to the US and a drop in US imports. Despite a recent positive phone call between Trump and Xi Jinping, trade tensions persist following tariff hikes and retaliatory measures earlier this year, impacting businesses and economies. Optimism from US officials and rising Asian shares reflect cautious hope, though challenges remain in restoring confidence and fulfilling prior commitments.

Key Points

• Friday's jobs numbers offer a glimpse into how high tariffs and trade policy uncertainty may impact unemployment, though future data in July or August will provide a clearer picture.
• Trade policy effects, including a "Liberation Day" initiated this spring, are not expected to be fully felt until late summer or beyond, regardless of current data.
• The US economy has shown resilience in the COVID era and early trade conflicts, but recent data on hiring and manufacturing indicate a slowdown as tariffs take effect.
• Analysts do not predict a labor market collapse, but hesitancy among employers during this uncertainty could lead to a prolonged hiring pause with potential repercussions.
• Concerns of stagflation are emerging, with dropping productivity, slower growth, and sticky inflation, while the market and the Fed await further data to assess the situation.

Summary

Friday's jobs report provides an early look at how high tariffs and trade policy uncertainty might affect unemployment, though the full impact may not be evident until July or August, as per RSM chief economist Joe Brusuelas. Despite the US economy's resilience during the COVID era and initial trade conflicts, recent data on hiring and manufacturing suggest a slowdown influenced by tariffs. Analysts do not foresee a labor market collapse, but employer hesitancy during this uncertain period could result in a prolonged hiring freeze, potentially leading to broader economic repercussions. Chris Zaccarelli of Northlight Asset Management warns of an inflection point where stagflation concerns—marked by declining productivity, slower growth, and persistent inflation—could dominate market narratives. The delayed effects of trade policy shifts, including a "Liberation Day" this spring, are expected to manifest later in the summer or beyond. Meanwhile, a seemingly calm labor market might mask underlying issues, as companies maintain readiness to hire at minimal cost. Both the market and the Federal Reserve continue to await further data to navigate these evolving economic challenges.

Key Points

• Elon Musk initially threatened to decommission SpaceX’s Dragon spacecraft amid a dispute with President Donald Trump over governmental contracts and Musk’s criticism of Trump’s tax bill on social media.
• Musk later retracted the threat, agreeing to advice to cool off, stating SpaceX would not decommission Dragon, though the seriousness of the initial threat remains unclear.
• Dragon is critical for NASA, serving as the only operational US vehicle for sending astronauts to the International Space Station (ISS) and a primary means for cargo delivery.
• An abrupt end to Dragon operations would severely impact NASA’s ISS program, with Boeing’s Starliner not yet certified for crew missions after a problematic 2024 test flight.
• SpaceX continues to plan private astronaut missions with Dragon, including one scheduled for June 10 with Axiom Space, and is contracted by NASA for future ISS deorbiting tasks.

Summary

Elon Musk recently sparked controversy by threatening to decommission SpaceX’s Dragon spacecraft, which transports astronauts and cargo to the International Space Station (ISS), during a public feud with President Donald Trump over government contracts and Musk’s criticism of Trump’s tax bill on social media. However, Musk quickly backtracked, agreeing to pause and not decommission Dragon, though the seriousness of his initial threat is uncertain. Dragon is vital to NASA, being the only operational US vehicle for ISS crew missions and a key cargo supplier, with billions in contracts to maintain ISS presence until its 2030 retirement. An abrupt halt to Dragon operations would leave NASA in a bind, as Boeing’s Starliner remains uncertified after a failed 2024 test flight. SpaceX also uses Dragon for private missions, with a civilian trip to the ISS planned for June 10 alongside Axiom Space, and is tasked with developing a vehicle to deorbit the ISS. The incident highlights the critical role of SpaceX in US space endeavors and the potential ramifications of political disputes on space exploration.

Key Points

• Elon Musk and Donald Trump engaged in a public feud, with Musk calling for Trump's impeachment and Trump threatening to cut Musk's government contracts.
• Musk's comments led to a 14% drop in Tesla shares and a $34 billion loss in his personal wealth.
• Efforts to de-escalate tensions included Musk signaling a cooling-off period and White House aides scheduling a call with him.
• The dispute partly stems from GOP tax legislation that would reduce electric vehicle tax credits, impacting Tesla's profits.
• Republican lawmakers and allies are caught in the middle, with some attempting to mediate between the two influential figures.

Summary

Elon Musk and US President Donald Trump found themselves in a highly publicized feud, marked by Musk's call for Trump's impeachment and insinuations about withheld Jeffrey Epstein files, while Trump threatened to terminate Musk's government contracts. The conflict, fueled by disagreements over GOP tax legislation that would cut electric vehicle credits affecting Tesla, led to a 14% drop in Tesla shares and a $34 billion loss in Musk's wealth. Musk initially criticized Trump harshly but later signaled a willingness to cool tensions, agreeing to maintain SpaceX's Dragon spacecraft operations and responding positively to calls for peace from allies like Bill Ackman. The dispute has placed Republican lawmakers in a difficult position, forced to navigate loyalties between Musk, a significant financial backer, and Trump, a dominant political figure. Efforts to mediate include a scheduled White House call with Musk and statements from figures like House Speaker Mike Johnson urging that policy differences remain impersonal. The clash highlights deeper tensions over policy and personal influence, with potential legal and practical challenges if contracts with Musk’s companies, integral to US space and defense, are severed.

Key Points

• US stock futures remained nearly flat on Thursday, with Dow Jones, S&P 500, and Nasdaq 100 showing minimal changes as investors awaited labor data and tariff-deal updates amid concerns over Trump's trade policies.
• Unemployment claims reached an eight-month high for the week ending May 31, signaling a slowing US labor market, with continuing claims near a four-year peak.
• Friday's May jobs report is anticipated to provide critical insights into the labor market's condition under the evolving trade environment.
• China's restrictions on rare-earth exports have intensified trade war concerns, impacting the US auto industry, with production pauses at Ford and other carmakers.
• Corporate earnings from Lululemon and Broadcom are expected on Thursday, while Tesla stock dropped over 3% in premarket trading amid Elon Musk's criticism of Trump's tax bill.

Summary

US stock futures showed little movement on Thursday as investors focused on upcoming labor data and developments in President Trump's tariff policies. Dow Jones, S&P 500, and Nasdaq 100 futures hovered near flat after a recent rally lost momentum, fueled by concerns over weak private-sector hiring and services data. Unemployment claims hit an eight-month high for the week ending May 31, with continuing claims near a four-year peak, indicating a cooling labor market. The awaited May jobs report on Friday is expected to shed light on economic impacts from trade changes. Meanwhile, China's rare-earth export curbs have escalated trade tensions, affecting the US auto industry, with production halts at Ford and others. On the corporate side, Lululemon and Broadcom are set to release earnings, while Tesla's stock fell over 3% in premarket trading as Elon Musk publicly criticized Trump's tax bill. Silver prices also surged to a 13-year high, reflecting broader market dynamics and investor interest in safe-haven assets amid geopolitical and trade uncertainties.