2025-06-24 21:13
ORLANDO, Florida, June 24 (Reuters) - TRADING DAY Making sense of the forces driving global markets Sign up here. By Jamie McGeever, Markets Columnist Global stocks zoomed to an all-time high on Tuesday and oil sank for a second day as a shaky truce between Iran and Israel sparked a widespread relief rally, while Fed Chair Jerome Powell reiterated that rate cuts can wait while policymakers assess the impact of tariffs. In my column today I look at why traders' dovish Fed bets may finally come good - softening U.S. data, plunging oil prices, and a surprise U-turn from a Fed hawk. More on that below, but first, a roundup of the main market moves. If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today. Today's Key Market Moves Truce triggers world equity whoosh A buying frenzy engulfed world stocks on Tuesday after U.S. President Donald Trump's announcement the previous evening that Iran and Israel had agreed a ceasefire. Immediate violations from both sides didn't dampen investors' spirits, and the ceasefire began to take hold as the day progressed. The MSCI World index hit a fresh peak, and Asian and emerging market stocks climbed to their highest levels since early 2022. In New York, the S&P 500 and Nasdaq came within 1% and 1.5%, respectively, of their recent all-time highs. It bears repeating that the situation is fluid, the truce is fragile, and nerves are stretched, reflected by Trump's expletive-laced rebuke of both countries early on Tuesday before he departed for a NATO summit in the Netherlands. But the market mood is buoyant. Just look at the oil price - its reversal in the first two trading days of the week has been extraordinary, with Brent crude futures recording a peak-to-trough decline of 18%. Oil is a smaller input in global industry, economic activity, and inflation today compared with decades gone by, but it is still significant. Oil is now 20% lower than it was this time last year, which is good news for consumers, businesses and, from an inflation standpoint, central banks. Fed Chair Jerome Powell's semi-annual testimony to Congress was the other main area of focus for investors on Tuesday, and they will have been relieved there was no hawkish curveball on the rate outlook. Powell repeated his position from last week's post-meeting press conference that policymakers can afford to wait and see the impact of tariffs on activity and prices before deciding their next step. "I do not want to point to a particular meeting. I don't think we need to be in any rush," he told lawmakers, distancing himself from some of his colleagues who have said recently they would consider cutting rates next month. But Powell wasn't any more hawkish than he was last week, and his steady steer helped pave the way for the rally. Despite the optimism washing over markets this week, there are reasons to be cautious on the U.S. economy. Figures on Tuesday showed that consumer confidence is falling, with pessimism toward the jobs market at its lowest level in over four years, and the current account deficit widened to a record $450 billion in the first quarter. Bowman turn, oil plunge challenge Fed's hawkish tilt Financial markets have consistently overestimated the Federal Reserve's readiness to cut interest rates in recent years. But the latest Fed chatter, softening economic data and a dramatic reversal in oil prices suggest they could be right this time. The central bank last week appeared to pour ice cold water on traders' hopes for a dovish steer. In the Fed's summary of economic projections, officials maintained their median 'dot plot' projection of two 25 basis point rate cuts this year. But it was an extremely close call, and they lowered their 2026 forecast to one cut from two. The consensus view in the days that followed was that policymakers' hawkish tilt reflected their commitment to anchoring inflation expectations. Traders' projections for rate cuts this year duly slipped to under 50 basis points. But maybe this read was premature. First, concerns about rising energy prices due to conflict in the Middle East have disappeared. Even though oil rose as much as 17% in the days after the Israel-Iran war erupted on June 13, it is now back below that level. The price is plunging and late on Monday U.S. President Donald Trump announced that the two enemies had agreed on a ceasefire. On top of that, a chorus of dovish comments from Fed officials in recent days - and not just from the usual suspects - suggests the U.S. central bank may be closer to cutting rates than thought less than a week ago. NEGATIVE SURPRISE There is certainly some justification for a dovish turn. On a fundamental level, U.S. economic data is softening. Citi's U.S. economic surprises index has been falling since the end of May and is now negative, meaning that economic data is underperforming consensus expectations. Last week it fell to the lowest since September last year. Caution is required, of course, when analyzing economic surprise indices after significant moves because expectations may have been too pessimistic or optimistic to begin with. But the current shift seems to be a legitimate red flag. "We look at both the momentum of reported data and its surprise versus consensus expectations. Both have dropped into negative territory," Citi's Stuart Kaiser notes, pointing out that the 'hard' activity data index is now negative. 180 DEGREE TURN? But an even bigger surprise for investors on Monday came from Fed Vice Chair for Supervision Michelle Bowman, who said she would consider voting for a rate cut as soon as July if inflation pressures "remain contained". Bowman's comments are significant. Granted, she has not spoken publicly about the economy or policy for two months, and in March she signaled that labor market conditions would likely become more important in the policymaking debate. But she has consistently been one of the more hawkish members of the Federal Open Market Committee since her appointment as Fed Governor in 2018. This came after Governor Christopher Waller, one of the FOMC's most reliably dovish members, on Friday said a rate cut next month should be on the table. That's no surprise. But if an FOMC hawk like Bowman is now singing from that same hymn sheet, traders and investors need to take notice. A cynic might wonder about the timing of Bowman's seemingly 180-degree turn, coming just as Trump has intensified attacks on Fed Chair Jerome Powell for not cutting interest rates. But there's no evidence to suggest political pressure is at play. And the recent oil price plunge will help her argument. On Monday, it tumbled 7%, the biggest decline in three years. This was even more remarkable considering it had opened the day 6% higher and hit a five-month high in response to the U.S. bombing of Iranian nuclear facilities on Saturday. Moreover, at no point following Israel's initial June 13 strike on Iran did the price of crude rise on a year-over-year basis. Indeed, oil prices have fallen since January, and are now down 20% year on year. If inflation is proving sticky, it's not because of energy prices. This will be music to Waller's - and now Bowman's - ears. And with one of the Fed's hawks now appearing to draw in their claws, it is possible that traders may not be overestimating the Fed's readiness to cut rates this time around. Their bets of 125 bps of easing by the end of next year, starting soon, could be close to the mark. What could move markets tomorrow? Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here. Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. https://www.reuters.com/business/aerospace-defense/global-markets-trading-day-graphic-pix-2025-06-24/
2025-06-24 21:06
June 24 (Reuters) - Parkland Corp (PKI.TO) , opens new tab shareholders on Tuesday voted in favor of a $9.1 billion deal to be acquired by U.S.-based Sunoco (SUN.N) , opens new tab. The company said 93.46% votes were for the deal, which will create America's largest independent fuel distributor. Sign up here. Sunoco in May agreed to buy Parkland in a cash and stock deal, which included debt. Sunoco had said each Parkland share will be exchanged for C$19.80 in cash and 0.295 Sunoco unit. The Canadian firm had undertaken a strategic review in March following persistent pressure from two of its largest shareholders Simpson Oil, which holds a nearly 20% stake, and activist investor Engine Capital. Sunoco will also be acquiring Parkland's 55,000-barrel-per-day Burnaby refinery, which produces 25% of the transportation fuel used in Canada's westernmost province of British Columbia. The transaction is expected to close in the second half of the year. https://www.reuters.com/sustainability/sustainable-finance-reporting/parkland-shareholders-vote-91-billion-acquisition-by-sunoco-2025-06-24/
2025-06-24 20:51
June 24 (Reuters) - Tropical storm Andrea is expected to become a post-tropical remnant low later tonight, the U.S. National Hurricane Center (NHC) said on Tuesday. Andrea, which is located about 1110 miles (1785 km) west of the Azores packing maximum sustained winds 40 miles per hour (65 km/h) is expected to begin weakening later tonight, and dissipate on Wednesday, the NHC said in its latest advisory. Sign up here. https://www.reuters.com/business/environment/tropical-storm-andrea-expected-become-post-tropical-remnant-low-tuesday-night-2025-06-24/
2025-06-24 20:50
Boston, Washington expected to surpass 100 degree F (37.8 C) Amtrak slowing train speeds, delaying travel NYC voters turn out in scorching heat to cast ballots NEW YORK, June 24 (Reuters) - Tens of millions of people in major cities across the U.S. Northeast are facing record high temperatures on Tuesday on what was expected to be the worst day of an oppressive heat wave that has spread over much of the country since late last week. Temperatures in Washington and Boston are expected to soar to 101 degrees Fahrenheit (38 Celsius), beating previous records by as much as 6 degrees, according to the National Weather Service. Sign up here. In New York City's Central Park, temperatures could reach 99 F (37 C), surpassing the area's past high of 96. There is also the potential for record heat across other parts of the Eastern U.S., including northern Georgia, the Carolinas, Virginia, Maryland and Pennsylvania, according to the NWS. "It looks like today is probably the worst day for widespread heat records," said Bob Oravec, lead forecaster at the National Weather Service in College Park, Maryland, adding that the most intense heat is concentrated in the Northeast. The extreme heat is causing disruptions to public transport across the Northeast, with U.S. passenger railroad Amtrak saying it will be forced to slow train speeds between 12 p.m. and 8 p.m. on Tuesday between Washington and New York and between Philadelphia and Harrisburg, which could lead to delays. Some tourist attractions are even being affected. The Washington Monument will be closed on Tuesday and Wednesday because of the heat, according to the National Park Service. Construction companies have been forced to compensate for the severe weather to ensure their construction workers are safe. Jeff Wagner, communications manager at construction firm Fluor, said the company was providing cooling stations and heavy-duty water bottles to its more than 2,000 laborers working on a pharmaceuticals project in Indiana. "We have safety meetings every morning, but knowing this was going to be an exceptionally hot week, (we spoke about) hydration and making sure workers are pacing themselves," said Wagner. He added that workers would start their shifts an hour earlier so they can finish before the hottest part of the day. In New York City, residents hoping to cast their votes in primary elections have been compelled to endure the soaring temperatures. Accountant Alex Antzoulatis, 53, who turned up at a poll site in Astoria, New York, on Tuesday to cast his ballot in the mayoral primary, told Reuters he regretted not voting by mail. He said he went to the poll site in the 100-F heat only because he sees voting as his duty, "but the heat will keep a lot of people away". The warm weather across the U.S. Plains and into Canada has also impacted crops. In Saskatchewan in Western Canada, where much of the country’s canola, spring wheat and pulse crops are grown, dryness in June hindered just-seeded crops. Rainfall in recent days came too late, said Yorkton, Saskatchewan farmer Bill Prybylski, adding that the damage was partly mitigated by the smoky air from wildfires, which stopped direct sunlight scorching crops. Oravec at the NWS said temperatures should start to fall on Wednesday. "Like Thursday's temperature high in New York is forecast to be 84 Fahrenheit, and is supposed to be 75 F on Friday." https://www.reuters.com/sustainability/climate-energy/us-cities-face-record-high-temperatures-worst-day-heat-wave-2025-06-24/
2025-06-24 20:47
June 24 (Reuters) - Iran's Revolutionary Guards denied earlier reports on Tuesday that there was a drone attack in the northwestern city of Tabriz, three Iranian news sites reported. Earlier on Tuesday, Iranian media said air defences were activated in the area amid a shaky ceasefire between Israel and Iran. Sign up here. https://www.reuters.com/world/middle-east/irans-revolutionary-guards-deny-reports-drone-attack-tabriz-2025-06-24/
2025-06-24 20:41
UK bioethanol industry threatened by U.S.-UK trade deal Future of AB Foods' UK plant to now be decided on June 26 AB Foods and Ensus want UK government support package LONDON, June 24 (Reuters) - Associated British Foods (ABF.L) , opens new tab has extended its deadline for deciding the fate of its Vivergo bioethanol plant, which is under threat of closure, to Thursday, hoping the UK government will step in with a support package. The company on June 11 had set a deadline of Wednesday before it starts redundancy consultations for the 160 staff at the plant in Hull, Northern England, if no deal was achieved with the government to soften the impact of last month's U.S.-UK trade deal. Sign up here. Under the deal, the UK's 19% tariffs on U.S. ethanol will fall to zero, through a 1.4 billion-litre (370 million gallon) quota - a figure equating to the size of the UK's entire ethanol market today. AB Foods and Ensus, which is owned by Germany's Sudzucker Group and operates a bioethanol plant in Teesside in Northern England, have warned that the trade deal, along with existing regulations that give U.S. producers an advantage in the British market, has made the operating environment impossible. "At the request of the government, ABF has agreed to postpone Vivergo closure decisions for 24 hours while discussions continue on the appropriate process for resolution of the issues facing the UK bioethanol industry," an AB Foods spokesperson said. Ensus and Vivergo together account for nearly all of the UK’s bioethanol production capacity. Along with supply chain partners, their plants support thousands of jobs. Britain's concession on ethanol was made in return for the removal of 25% additional tariffs on steel and aluminium, and a quota of 100,000 cars at a duty of 10%. https://www.reuters.com/business/healthcare-pharmaceuticals/ab-foods-postpones-uk-bioethanol-plant-closure-decision-by-24-hours-2025-06-24/
