June 5th, 2025
Market Performance:
- U.S. stocks were heading higher again on Thursday as investors digested good news from President Trump over U.S./China trade talks.
- The Dow Jones Industrial Average gained 0.3% after breaking a four-day win streak on Wednesday. The S&P 500 rose 0.4%, and the tech-heavy Nasdaq Composite gained 0.7%.
- European stocks were struggling, as the European Central Bank signals that it may be nearing the end of its easing cycle, driving a sell-off in European government bonds.
Economic Takeaways:
- Department of Labor data out Thursday showed weekly claims for unemployment benefits hit their highest level in eight months during the final full week of May.
- The total of continuing claims continued to hover near the highest level in nearly four years, as the US labor market continues to show signs of slowing.
- S. vehicle sales dropped sharply in May, falling to a seasonally adjusted annual rate of 15.65 million from 17.27 million in April, according to Wards Intelligence. Earlier in the year, sales had surged as consumers rushed to buy ahead of expected tariffs.
- The European Central Bank (ECB) lowered its key interest rates by 25 basis points, in line with expectations, pointing to inflation nearing its 2% medium-term target.
- As of early Thursday, futures markets were pricing in less than a 1% chance of a Federal Reserve rate cut in June, with the odds rising to nearly 30% for July, according to the CME FedWatch Tool. The probability of a cut in September climbed to over 75%, up from earlier in the week, following weaker-than-expected jobs and services data released Wednesday.
A Call with China
Trump confirmed he spoke with Chinese President Xi Jinping following reports from Chinese state media that the two leaders held a phone call on Thursday at Trump’s request.
“The call lasted about an hour and a half and ended very positively for both countries,” Trump posted on social media Thursday morning. “Our teams will meet soon at a location to be determined.”
In recent days, stocks have rallied as investors bet on a familiar pattern known on Wall Street as the “TACO” trade — short for “Trump Always Chickens Out” — reflecting the belief that Trump often backs away from tough tariff measures.
Tesla Falls as Musk and Trump Feud Continues
Tesla (TSLA) shares fell sharply on Thursday as tensions between CEO Elon Musk and former President Trump escalated in a very public way.
Speaking from the Oval Office, Trump expressed frustration over Musk’s recent criticism of a bill tied to electric vehicle mandates. “I’m very disappointed, because Elon knew the inner workings of this bill better than almost anybody here—better than you people,” Trump told reporters. “All of a sudden he had a problem, and he only developed the problem when he found out that we’re going to have to have to cut the EV mandate.”
“Elon and I had a great relationship. I don’t know if we will anymore. I was surprised,” Trump added.
In what appeared to be a response, Musk posted a one-word reply on X, the platform he owns: “Whatever.”
Tesla stock dropped to session lows Thursday afternoon, sliding as much as 9% as Musk reacted in real-time to Trump’s remarks.
Circle Internet Group Made its Grand Debut
Stablecoin issue Circle Internet Group (CRCL) shares are popping today after the company began trading at $69.
The stock quickly hit $92 after several trading halts. Shares are now up more than 200% from the company’s IPO price of $31 per share.
The company, led by CEO Jeremy Allaire, said Thursday in a filing that it plans to sell 24 million shares of Class A common stock in total – 9.6 million to be sold by the company and another another 14.4 million by existing shareholders – at an expected price range of $24 to $26 apiece, valuing the company at around $5.65 billion. It would have a valuation of about $6.7 billion when including outstanding options and other stock, according to Reuters.
Per the filing, Cathie Wood’s ARK Investment Management has indicated interest in purchasing up to $150 million of the shares.
Notables
- Broadcom edged up 0.75% in pre-market trading Thursday ahead of its earnings report due after the close, as investors look for signs of continued strength in AI chip demand. However, the spotlight may fall more on Broadcom’s forward guidance, especially in a market where even slight dips in momentum can spark sell-offs—CrowdStrike (CRWD) being a recent example, with shares sliding despite a solid quarter due to a cautious revenue outlook.
- Ciena (CIEN) sank 7.6% in pre-market action after missing earnings estimates, even though its quarterly revenue beat Wall Street forecasts. The optical networking company also repurchased 1.2 million shares and cited a “positive network infrastructure spending environment.”
- MongoDB (MDB) jumped 16.3% before the bell after delivering both earnings and guidance that topped expectations.
- Five Below (FIVE) climbed 7.6% in early trading after reporting strong earnings results.
- Visa (V) and Mastercard (MA) each rose around 0.5% in morning trading, continuing to hover near all-time highs. Visa also received an analyst upgrade from Mizuho. The resilience in credit card stocks is seen as a sign of underlying consumer strength.
- Tesla (TSLA) slipped more than 2% in early trade following reports of declining sales in several European markets during May.
- Micron (MU) gained 1.6% pre-market after Mizuho raised its price target on the chipmaker to $130 from $124, citing expectations for high bandwidth memory revenue to grow 55% annually through 2027.
- Cracker Barrel (CBRL) rose 3.8% after beating earnings estimates and reaffirming its fiscal 2025 guidance.
What’s Important Ahead
Earnings from AI giant Broadcom (AVGO) loom after the close today.
Investors can look forward to tomorrow’s release of the closely watched May jobs report, which economists say will offer the “first real look at how the labor market is faring under a rapidly changing trade environment.
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