The S&P 500 Index ($SPX) (SPY) Thursday closed up +0.38%, the Dow Jones Industrials Index ($DOWI) (DIA) closed up +0.24%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +0.24%.  June E-mini S&P futures (ESM25) are up +0.32%, and June E-mini Nasdaq futures (NQM25) are up +0.19%. 

Stock indexes on Thursday recovered from losses and moved higher as the US jobless claim and PPI reports were Fed-friendly, which knocked bond yields lower and boosted the prospects for Fed rate cuts.  The 10-year T-note yield on Thursday fell -6 bp to 4.36%.  Stocks and bonds maintained their gains Thursday afternoon as decent demand for the Treasury’s $22 billion auction of 30-year T-bonds curbed fears that mounting deficits would cause investors to shun US debt securities.

Stocks initially opened weaker on Thursday as comments from President Trump sparked trade uncertainty and risk-off sentiment in asset markets. Late Wednesday, Mr. Trump said he intends to send letters to dozens of US trading partners in the next one to two weeks setting unilateral tariffs, ahead of the July 9 deadline that came with his 90-day pause. 

Also, rising geopolitical risks in the Middle East are negative for stocks.  US authorities ordered some staff to depart the US embassy in Baghdad after Iran threatened to strike US bases in the region if attacked.  Tensions in the region have increased this week as talks between the US and Iran over its advancing nuclear program appear to have hit an impasse.  President Trump said Wednesday that he’s “less confident” about convincing Iran to shut down its nuclear program.  The US and Iran are set to meet in Oman on Sunday for their sixth round of nuclear negotiations.  If the US and Iran are at an impasse, it is possible that Israel might decide to proceed with a military attack on Iran’s nuclear facilities.

US weekly initial unemployment claims were unchanged at an 8-month high of 248,000, showing a weaker labor market than expectations of a decline to 242,000.  Weekly continuing claims rose +54,000 to a 3-1/2 year high of 1.956 million, showing a weaker labor market than expectations of 1.910 million.

The US May final-demand PPI report moved up to +2.6% y/y from +2.5% y/y in April, right on expectations.  The May PPI ex-food and energy report eased to +3.0% y/y from +3.2% y/y in April, better than expectations of +3.1% y/y.

The markets this week will focus on any fresh tariff news.  On Friday, the preliminary June University of Michigan US consumer sentiment index is expected to climb +1.4 to 53.6. 

The markets are discounting the chances at 3% for a -25 bp rate cut at the next FOMC meeting on June 17-18.

Overseas stock markets on Thursday settled mixed.  The Euro Stoxx 50 fell to a 1-week low and closed down -0.609%.  China’s Shanghai Composite closed up +0.012%.  Japan’s Nikkei Stock 225 closed down -0.65%.

Interest Rates

September 10-year T-notes (ZNU25) Thursday closed up +12 ticks.  The 10-year T-note yield fell -6.3 bp to 4.357%.  Sep T-notes moved higher on Thursday on carryover support from a rally in European government bonds.  Also, falling inflation expectations are supportive of T-notes as the 10-year breakeven inflation expectations rate dropped to a 5-week low Thursday of 2.262%.  T-notes raced to their highs on the Fed-friendly jobless claim and PPI reports.  T-notes maintained their gains on decent demand for the Treasury’s $22 billion auction of 30-year T-bonds that had a bid-to-cover ratio of 2.43, above the 10-auction average of 2.42. 

Gains in T-notes were limited after a recovery in stocks curbed safe-haven demand for T-notes.  Also, supply pressures weighed on T-notes as the Treasury auctioned $22 billion of 30-year T-bonds Thursday to conclude this week’s $119 billion auction package of T-notes and T-bonds. 

European government bond yields on Thursday moved lower.  The 10-year German bund yield fell to a 5-week low of 2.468% and finished down -5.7 bp to 2.478%.  The 10-year UK gilt yield dropped to a 5-week low of 4.476% and finished down -7.6 bp to 4.477%.

ECB Executive Board member Schnabel said the ECB’s interest rate-cutting campaign may soon be over, with inflation and the economy both on track. 

ECB Governing Council member Simkus said he favors a pause in interest rate moves by the ECB due to “very big uncertainty” over US tariff policy. 

UK Apr manufacturing production fell -0.9% m/m, weaker than expectations of -0.7% m/m.  Also, Apr industrial production fell -06% m/m, weaker than expectations of -0.5% m/m.

Swaps are discounting the chances at 13% for a -25 bp rate cut by the ECB at the July 24 policy meeting.

US Stock Movers

Oracle (ORCL) closed up more than +13% to lead gainers in the S&P 500 after reporting Q4 adjusted revenue of $15.90 billion, better than the consensus of $15.59 billion. 

Calavo Growers (CVGW) closed up more than +16% after announcing it has received a non-binding, indicative proposal to acquire all of its outstanding shares for $32 a share. 

Cardinal Health (CAH) closed up more than +4% to lead healthcare stocks higher after boosting its full-year adjusted EPS estimate to $8.15-$8.20 from a previous estimate of $8.05-$8.15.  stronger than the consensus of $8.14.  Also, UnitedHealth Group (UNH) closed up more than +2% to lead gainers in the Dow Jones Industrials.  In addition, Humana (HUM), Cigna Group (CI), Elevance Health (ELV), and HCA Healthcare (HCA) closed up more than +1%.

Anglogold Ashanti Plc (AU) closed up more than +6% after Roth Capital Partners initiated coverage on the stock with a recommendation of buy and a price target of $52. 

Datadog (DDOG) is up more than +3% to lead gainers in the Nasdaq 100 after Wolfe Research upgraded the stock to outperform from peer perform with a price target of $150.

Bunge Global SA (BG) closed up more than +2% after saying it is close to receiving a decision from Chinese antitrust authorities on its $8.2 billion purchase of Viterra, nearly two years after the deal was announced.

Monster Beverage (MNST) closed up more than +1% after Stifel resumed coverage on the stock with a recommendation of buy and a price target of $72.

Airline stocks were under pressure Thursday on demand concerns after US inflation news showed airfares in May fell -2.7% m/m, the fourth straight month-over-month decline, the longest skid in nearly a year.  As a result, Southwest Airlines (LUV) closed down more than -2%.  Also, United Airlines Holdings (UAL) and American Airlines Group (AAL) closed down more than -1%.

GameStop (GME) closed down more than -22% after announcing plans to offer $1.75 billion of convertible senior notes due 2032. 

Oxford Industries (OXM) closed down more than -14% after cutting its full-year adjusted EPS forecast to $2.80-$3.20 from a previous forecast of $4.60-$5.00, well below the consensus of $4.50. 

Boeing (BA) closed down more than -4% to lead losers in the S&P 500 and Dow Jones Industrials after a 787 Boeing Dreamliner aircraft operated by Air India crashed shortly after takeoff in Ahmedabad, India.

GE Aerospace (GE) closed down more than -2% after a Boeing 787 Dreamliner aircraft crashed shortly after takeoff in Ahmedabad, India.  GE makes the GEnx-1B engines that power the 787 Dreamliner.

Omnicon Group (OMC) closed down more than -2% after the New York Times reported the FTC is considering restrictions on Omicon and Interpublic Group to prevent the combined company from refusing to place ads on platforms for political reasons.

Earnings Reports (6/13/2025)

B Riley Financial Inc (RILY), Compass Diversified Holdings (CODI), Golden Matrix Group Inc (GMGI), Outdoor Holding Co (POWW), Roadzen Inc (RDZN), Seneca Foods Corp (SENEB).