Market Movements on Thursday 5-Jun-25

Market Movements on Thursday 5-Jun-2025:

• Major Indexes:

  • S&P 500 closed down -0.53%.

  • Dow Jones Industrial Average closed down -0.25%.

  • Nasdaq 100 closed down -0.80%.

  • June E-mini S&P futures (ESM25) down -0.52%.

  • June E-mini Nasdaq futures (NQM25) down -0.84%.

• Early Rally:

  • Stock indexes initially gained, boosted by hopes for easing US-China trade tensions.

  • S&P 500 reached a 3.25-month high.

  • Nasdaq 100 posted a 3.5-month high.

  • US and Chinese presidents agreed to continue trade talks, with Xi Jinping urging the US to remove “negative measures”.

Market Movements Impacting Market Sentiment:

• Tesla’s Major Decline:

  • Tesla (TSLA) dropped more than -14% after President Trump proposed ending government contracts and subsidies for Elon Musk’s companies.

  • This news heavily impacted technology stocks, dragging the broader market down.

• Labor Market Concerns:

  • US weekly jobless claims rose unexpectedly to a 7-3/4 month high of 247,000, signaling a weaker-than-expected labor market.

  • This added pressure to stocks and weighed on market sentiment.

• Productivity & Labor Cost Revisions:

  • The US Q1 nonfarm productivity was revised downward to -1.5% from -0.8%, signaling a slowdown in efficiency.

  • Unit labor costs were revised upward to 6.6%, intensifying inflation concerns.

• Bond Yields Rise:

  • The 10-year T-note yield surged +4 basis points to 4.40%.

  • This increase in yields was driven by negative carryover from European markets and expectations of continued inflation.

Market Movements Economic Data:

• US Weekly Jobless Claims:

  • +8,000 rise, reaching 247,000—a 7-3/4 month high.

  • Signaling a weaker labor market than expected (235,000).

• US Trade Deficit:

  • April trade deficit shrank to a 20-month low of -$61.6 billion (narrower than expectations of -$66.0 billion), which was positive for Q2 GDP.

• US Q1 Nonfarm Productivity:

  • Revised down to -1.5% from -0.8%.

  • Unit labor costs revised up to 6.6% from 5.7%.

• Hawkish Fed Comments:

  • Fed Governor Kugler stated disinflation has slowed and warned about the effects of higher tariffs raising inflation through 2025.

  • Philadelphia Fed President Harker emphasized the need to keep interest rates steady as the economy adjusts to Trump’s policies on immigration, trade, taxes, and regulation.

Market Movements Focus:

• June FOMC Meeting:

  • Market expectations suggest a 3% chance for a -25 basis point rate cut at the June 17-18 meeting.

• May Jobs Report (Friday):

  • Nonfarm payrolls expected to rise by 125,000.

  • Unemployment rate expected to hold at 4.2%.

  • Average hourly earnings expected to increase +0.3% m/m and +3.7% y/y.

Market Movement Performance:

• Euro Stoxx 50:

  • Closed up +0.10%.

• China’s Shanghai Composite:

  • Rose +0.23%, reaching a 1.5-week high.

• Japan’s Nikkei 225:

  • Closed down -0.51%.

Market Movements Bond Market:

• 10-Year T-Notes:

  • Closed down -10 ticks, yield rose to 4.397% (from 4.310%).

  • The rise in yields was attributed to a rebound in global yields and the hawkish ECB stance.

• European Bonds:

  • German Bund yield rose +5.5 basis points to 2.582%.

  • UK Gilt yield rose +1.0 basis points to 4.616%.

ECB Updates:

• ECB Rate Cut:

  • ECB cut deposit facility rate by -25 basis points to 2.00%.

  • President Lagarde noted risks to growth “tilted to the downside” but highlighted stronger labor markets and rising incomes as support.

• Eurozone PPI:

  • April PPI fell -2.2% m/m, but rose +0.7% y/y (weaker than expected).

• German Factory Orders:

  • April factory orders rose +0.6% m/m, beating expectations of -1.5%.

Notable US Stock Movers:

• Tech Sector:

  • Advanced Micro Devices (AMD) down -2%.

  • Marvell Technology (MRVL), Nvidia (NVDA), Intel (INTC), Qualcomm (QCOM) all down -1%+.

  • Tesla (TSLA) led Nasdaq 100 losers, dropping -14% after tariff news.

• Brown-Forman (BF.B):

  • Fell -17% after weak Q4 results, missing consensus.

• PVH Corp (PVH):

  • Dropped -17% after cutting 2026 EPS forecast.

• Ciena Corp (CIEN):

  • Fell -12% after reporting weak Q2 EPS.

• Costco Wholesale (COST):

  • Down -3% after reporting May comparable sales growth of +4.3%, missing expectations.

• Procter & Gamble (PG):

  • Down -1% after announcing a $1.6B charge for workforce cuts.

• Mining Stocks:

  • Freeport-McMoRan (FCX) and Anglogold Ashanti Plc (AU) up +2% due to rising silver prices.

• MongoDB (MDB):

  • Up +12% after Q1 EPS beat and raised 2026 forecast.

• Five Below (FIVE):

  • Rose +5% on strong Q1 comparable sales growth.

• Dollar Tree (DLTR):

  • Gained +9% after an upgrade by JPMorgan Chase with a $111 price target.

• MarketAxess Holdings (MKTX):

  • Up +3% after reporting +44% y/y increase in May’s average daily volume.

• Tractor Supply (TSCO):

  • Closed up +3% after positive demand commentary at an industry conference.

Conclusion:

The markets faced volatility on Thursday, with a mix of positive and negative catalysts driving action. US-China trade easing brought initial optimism, but Tesla’s sharp decline, labor market weakness, and higher bond yields weighed on investor sentiment. Market focus now shifts toward the May jobs report and ongoing trade talks, with future rate expectations remaining a key theme for the coming weeks.