2025-06-05 10:04

S&P 500 now up 1.5% for 2025, closing in on February record high Cboe volatility index recedes, around long-term median Investors still wary of tariff-tied volatility, with valuations elevated NEW YORK, June 5 (Reuters) - After months of Wall Street gyrations to the twists and turns of U.S. trade policy, signs suggest stock investors are becoming more resilient to developments and cautiously defaulting to optimism that they have weathered the worst of the tariff-related shocks. U.S. equities have edged higher over the past two weeks as they digest a sharp rally that has brought the benchmark S&P 500 (.SPX) , opens new tab within 3% of its February record high, fueled in part by easing fears about the economic fallout from tariffs. Sign up here. A case in point: stocks ended Monday's session higher even as markets had grappled with President Donald Trump's announcement of doubling steel tariffs to 50%. Trump's stunning "Liberation Day" tariff announcement on April 2 sent stocks plunging and set off some of the most extreme market swings since the onset of the COVID-19 pandemic five years ago. Since then, volatility measures have moderated considerably, and, with the market's rebound, there are signs that technical damage from the slide has healed. Still, investors are mindful that markets remain susceptible to daily swings stemming from negotiations between the U.S. and trading partners as key deadlines near in coming weeks, with elevated valuations making stocks more vulnerable to disappointments. "What has allowed this almost full recovery in the stock market hinges on the negotiations that are now under way," said Angelo Kourkafas, senior investment strategist at Edward Jones. "Markets, consumers and businesses have vested interest that we get clarity sooner than later," Kourkafas said. "So potentially it's going to be a critical summer that is going to test the market's momentum." After falling to the brink of confirming a bear market on April 8, the S&P 500 has surged back nearly 20% and erased its losses for the year. Near the halfway mark of 2025, the index is now up 1.5%. While Trump's tariffs remain a risk, the market no longer is perceiving them as "this big outlier event," said Keith Lerner, co-chief investment officer at Truist Advisory Services. "We went through a period where the only thing that mattered for the markets was tariffs," Lerner said. "And now we are in a period where tariffs still matter, but they are not the only thing that matters." Truist is among the firms becoming more upbeat on the outlook for equities, with RBC Capital Markets and Barclays this week lifting their year-end targets for the S&P 500. Deutsche Bank strategists this week boosted their year-end target to 6,550, about 10% above current levels, as they cited a less severe expected tariffs hit to corporate profits. The strategists noted they expect the rally to be "punctuated by sharp pullbacks on repeated cycles of escalation and de-escalation on trade policy." Several investors and strategists pointed to a "base case" on Wall Street emerging for Trump's tariffs - 10% broadly, 30% on China along with some specific sectoral levies. The market "started saying the worst is behind us in terms of this whole tariff discussion," said King Lip, chief strategist at BakerAvenue Wealth Management. "The U.S. and China still have a lot of things to work out, but likely the worst is behind us." MODERATING VOLATILITY Volatility measures indicate calming fears about trade. The Cboe Volatility Index (.VIX) , opens new tab, an options-based measure of investor anxiety, reached 52.33 in early April, its highest closing level in five years, but has steadily receded and hovered at 17.6 on Wednesday, around its long-term median. In another sign, the average daily range of the S&P 500 has fallen to about 75 points, on a 10-session basis, about one-third the size from April during the height of post-Liberation Day volatility. Meanwhile, the S&P 500 has traded above its 200-day moving average - a closely watched trend-line - for about three weeks. The percentage of S&P 500 stocks trading in some form of an uptrend has jumped from 29.4% at the April 8 low to 60% as of last week, said Adam Turnquist, chief technical strategist for LPL Financial. "There is a growing list of technical evidence that suggests this recovery is real," Turnquist said in a note this week. Options data also suggests growing bullishness. Over the last month, on average about 0.84 S&P 500 call options traded daily against every put contract traded, the most this measure of sentiment has favored call contracts in at least the last four years, according to a Reuters analysis of data from options analytics firm Trade Alert. Calls confer the right to buy stocks at a specific price and future date, while puts grant the right to sell shares. To be sure, some investors warn the threat of tariff disruptions is not going away anytime soon and are wary of market complacency. "There is still just so much uncertainty," said Matthew Miskin, co-chief investment strategist at John Hancock Investment Management. Indeed, talk of the acronym "TACO" - Trump Always Chickens Out - has spread on Wall Street as a rationale for why markets should not fear harsh tariffs because many believe they will likely be walked back. But some investors are worried about a backlash from the president. BCA Research strategists said they were wary of "relying on a TACO backstop." "Trade tensions may have peaked, but we are unwilling to assume they won’t sporadically rise from current levels," BCA said in a note this week. Stock valuations also continue to swell, with the S&P 500's forward price-to-earnings ratio reaching 21.7, its highest level since late February and well above its long-term average of 15.8, according to LSEG Datastream. Stocks are at "a more vulnerable level," said Chuck Carlson, chief executive officer at Horizon Investment Services. "The market is probably going to be a little bit more sensitive to what it perceives as negative news." https://www.reuters.com/business/us-stocks-heal-tariff-pain-trade-news-keep-markets-edgy-2025-06-05/

2025-06-05 09:49

Company to cut back discounts in Americas and EMEA Forecasts profit growth in fiscal 2026 2025 profit beats analysts' estimates Shares up 17% June 5 (Reuters) - British bootmaker Dr Martens (DOCS.L) , opens new tab forecast a return to profit growth in the current financial year on Thursday, backed by its new CEO's plan to put more emphasis on shoes, sandals, and bags, as well as the boots it is best-known for. Shares in Dr Martens jumped 17% as the market welcomed profit for its full financial year ended March 30 that beat expectations, and CEO Ije Nwokorie's strategy shift. Sign up here. The company also plans to scale back discounting in its key markets including the U.S. "We're shifting our strategy now to broaden our focus and give people more reasons to buy Dr Martens," Nwokorie told Reuters. "The strategy that the business had... broke growth in boots, built awareness around the world - but the market shifted away from boots," he added. Online sales of shoes, mules, and sandals grew and at Dr Martens' stores in the 2025 financial year, while sales of boots, which sell for $110 and up, declined. The company makes most of its lace-up chunky boots in Vietnam but said despite U.S. tariffs it would not hike prices of its spring/summer collection in the United States as the products were already in the country. Dr Martens has shifted its supply chain away from China, where it used to make 50% of its products, and now expects to produce 62% of its autumn/winter collection in Vietnam and 31% in Laos. Ahead of the possible return of a 46% U.S. tariff on Vietnam, Dr Martens said most of its autumn/winter collection will be in transit or in the U.S. by the start of July. "We've looked at different scenarios, but we're dealing with the reality in front of us and we feel confident about our ability to ride these waves," said Nwokorie. Since its initial public offering in January 2021, Dr Martens shares have lost more than 80% of their value. As part of his turnaround push, Nwokorie announced a new Americas president and new chief brand officer last week. The company said adjusted pre-tax profit for its 2026 financial year would be within the range of analysts' expectations, between 54 million pounds and 74 million pounds. For its year ended March 30, Dr Martens reported adjusted pre-tax profit of 34.1 million pounds ($46 million), above analysts' consensus forecast of 30.6 million pounds. Revenue from the Americas fell 11% during the year. https://www.reuters.com/business/bootmaker-dr-martens-cut-discounts-americas-emea-2025-06-05/

2025-06-05 09:09

LONDON, June 5 (Reuters) - Few British businesses now expect to be directly affected by recent changes in U.S. trade policy, with only 12% naming it as one of their top three sources of uncertainty, down from 22% a month earlier, a Bank of England survey showed on Thursday. U.S. President Donald Trump announced wide-ranging tariffs on imports to the United States in early April. Britain secured a partial exemption from the tariffs in early May, although the details are still to be finalised. Sign up here. The BoE said 70% of businesses surveyed in May as part of its monthly Decision Maker Panel expected that U.S. tariffs would have no impact on their sales, prices or investment plans. Twenty-two percent expected sales to fall over the year ahead, 20% said they would invest less, 15% expected to lower prices and 7% expected to raise prices as a result of changes in U.S. trade rules, the BoE said. The survey took place from May 9 to May 23 and covered 2,129 firms. BoE Governor Andrew Bailey has said that domestic wage and price developments are likely to be important for future BoE rate cuts than U.S. trade policy, although April's tariffs did help swing some officials' decision to vote for a cut in May. May's DMP survey showed that firms surveyed in the three months to May expected to raise wages by 3.7% over the next 12 months, the lowest amount since the BoE started asking this question regularly in 2022. Businesses in the panel said they had raised wages by 4.8% over the 12 months to May - some way below the 5.6% increase in wages for the whole economy recorded in official data for the first quarter of the year. Firms expected to raise prices by 3.7% over the coming year, 0.2 percentage points less than they expected in April. https://www.reuters.com/sustainability/sustainable-finance-reporting/british-firms-shrug-off-us-tariffs-boe-survey-shows-2025-06-05/

2025-06-05 07:28

JAKARTA, June 5 (Reuters) - Oversupply in the global nickel market is expected to persist over the next few years given production capacity expansion and slower growth in demand for the metal used in batteries and stainless steel, speakers at an industry event said this week. A surge in new nickel supply in Indonesia, the world's biggest producer with a market share of about 63%, has led to benchmark prices halving over the past three years. Sign up here. "The market is in oversupply, and in Indonesia, several projects in the pipeline will be completed soon, increasing production capacity," Macquarie analyst Jim Lennon told an industry conference organized by Shanghai Metals Market in Jakarta. Lennon expects the surplus to continue until 2027-2028. The most-traded nickel contract on the London Metal Exchange traded at $15,380 per metric ton as of 0400 GMT on Thursday, after touching a five-year low of $13,865 on April 7. Nickel hit a record high above $48,000 a ton in early 2022. Lennon said the $15,000 level is key for industry costs. After production cuts began in 2022-2023, half of existing producers are at risk if prices fall below that level, he said. Meanwhile, nickel demand growth has been weighed down by the surge in use of cheaper lithium iron phosphate batteries. The analyst has cut his estimate for the battery sector's nickel demand in 2030 to 967,000 tons, compared with an industry consensus forecast for 1.5 million tons two years ago. The battery sector consumed 518,000 tons of nickel last year. Denis Sharypin, strategic marketing director at Russia's Nornickel, said prices pushed down by oversupply mean that about one-fourth of nickel producers globally are making losses on a cash-cost basis. Indonesian smelters of nickel pig iron, an alloy used in stainless steel, have also been battling compressed margins, said Steven Chen, global sales head at Eternal Tsingshan Group Ltd, part of China's Tsingshan Holding Group. "Smelters are really struggling, which may lead to reductions in production, and widespread cutbacks or shutdown in some of the smaller smelting operations may be in a not-distant future," Chen said. Indonesia's mining minister has said the government will manage nickel ore supply and demand to support prices. https://www.reuters.com/markets/commodities/nickel-oversupply-persist-expansion-slower-demand-growth-industry-experts-say-2025-06-05/

2025-06-05 07:24

June 5 (Reuters) - European shares traded slightly higher on Thursday, supported by strength in automakers and industrial metal miners as investors awaited the European Central Bank's policy decision. The pan-European STOXX 600 index edged 0.2% higher by 0704 GMT, extending gains from the previous session after Germany's approval of a tax relief package lifted investor sentiment. Sign up here. Investors remained cautious ahead of the ECB meeting later in the day, where a 25-basis-point interest rate cut is widely expected. Industrial metal miners (.SXPP) , opens new tab gained 0.6%, supported by firm copper prices, while automakers (.SXAP) , opens new tab rebounded 0.5%, recovering from losses in the previous session. Trade uncertainty remained unresolved as U.S. President Donald Trump's deadline for countries to present their improved trade negotiations passed without any concrete developments. A defence spending commitment of 5% of GDP across the NATO alliance will happen, U.S. Defense Secretary Pete Hegseth told reporters in Brussels ahead of a NATO defence ministers' meeting. Defence stocks in the bloc were broadly lower, with the index (.SXPARO) , opens new tab down 0.3%. Among stocks, Eutelsat (ETL.PA) , opens new tab fell 13% after South Korea's Hanwha Systems (272210.KS) , opens new tab offered to sell its entire 5.4% stake in the company for about 78 million euros ($85 million). Shares of London-listed Wizz Air (WIZZ.L) , opens new tab plunged 22% after the budget carrier reported an annual operating profit that came in below analysts' expectations. https://www.reuters.com/markets/europe/european-shares-edge-higher-ahead-ecb-policy-decision-2025-06-05/

2025-06-05 07:23

BEIJING, June 5 (Reuters) - Floods in northern China from June to August are likely to be more severe this year, authorities said on Thursday in an initial forecast for a region spanning densely populated cities to sprawling cropland vital to grain cultivation. Extreme storms and floods are set to be more frequent and more intense, state broadcaster CCTV cited the water resources ministry as saying. Sign up here. China is no stranger to summer floods, especially its south. But as global warming picks up pace, the entire country has been roiled by extreme swings from record precipitation to wilting drought, driving mitigation efforts, even in the historically drier north. https://www.reuters.com/business/environment/china-warns-more-severe-northern-floods-this-summer-2025-06-05/