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, who looked like he'd been out drinking. 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.

Today's news will be dominated by the announcement of May producer prices in the US ealy afternoon, a statistic that will once again fuel inflationary speculation. The market is expecting a rebound after a dip in April. At the same time, there will also be the ritual weekly jobless claims.

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 prevails, 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:

See the full calendar here.

  • GBP / USD: US$1.36
  • Gold: US$3,373.14
  • Crude Oil (BRENT): US$69.26
  • United States 10 years: 4.42%
  • BITCOIN: US$107,716

In corporate news:

  • Reckitt Benckiser is negotiating the sale of its Essential Home business to Advent International.
  • VodafoneThree aims to expand its UK broadband operations twofold following a merger valued at 16.5 billion pounds.
  • Value & Indexed Property Income Trust announced its annual profit, surpassing its benchmark index.
  • Ten Lifestyle Group PLC has secured a multi-year contract with a Japanese financial services provider.
  • Colas has secured a 58 million euros contract with Network Rail in the UK to enhance railway infrastructure.
  • InPost's acquisition of Yodel proceeds as the English High Court dismissed an injunction motion.
  • Clas Ohlson's financial results reveal increased revenue and profit, with a proposed dividend of 7.00 SEK per share.
  • LPP reported a 20% increase in Q1 net profit to 334 million zlotys, surpassing expectations.
  • TIM's stock price surged following Poste Italiane's acquisition of a 24.82% stake.
  • Generali has launched a EUR 500 million subordinated Tier 2 bond issue.
  • 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.

See more news from UK listed companies here

Analyst Recommendations:

  • Firstgroup Plc: Peel Hunt maintains its buy recommendation and raises the target price from GBX 210 to GBX 240.
  • Glencore Plc: HSBC maintains its buy recommendation with a price target raised from 3.10 to GBP 3.45.
  • Wise Plc: Berenberg maintains its buy recommendation and raises the target price from 1240 to GBX 1270.
  • Pan African Resources Plc: Berenberg maintains its buy recommendation and reduces the target price from GBX 57 to GBX 55.
  • International Consolidated Airlines Group, S.a.: BNP Paribas Exane maintains its outperform recommendation and raises the target price from GBX 400 to GBX 450.
  • Rentokil Initial Plc: RBC Capital maintains its outperform rating and reduces the target price from GBX 450 to GBX 440.
  • Sse Plc: Citigroup remains neutral recommendation with a price target raised from GBP 16.14 to GBP 17.31.
  • Gb Group Plc: Jefferies maintains its buy recommendation and reduces the target price from 350 to GBX 315.
  • Beazley Plc: Barclays maintains its overweight recommendation and reduces the target price from 10.70 to GBP 10.
  • Lancashire Holdings Limited: Barclays maintains its equalweight recommendation and reduces the target price from 7 to GBP 6.60.