Daily Market Report June 12th, 2025
After a strong start with the Dow, S&P and the Nasdaq higher by 250, 21 and 85 points, things took a sharp downward turn after the Commerce Department Secretary made his usual hard to believe comments about how great the recently concluded U.S.-China meetings were and about how many “deals” that other countries were begging the U.S. to take as only one vague one with the U.K. is on the radar.
The Dow ended down by only 1 point to 42,865 due to some strength in CAT, IBM at a new high, GS, UNH of all things and another new high in V.
The S&P fell by 16 points to 6022 as most technology stocks were weak while the Nasdaq was the worst performer with a 99 point decline to 19,615. It was the first decline in four days.
The Russell 2000 Index of small stocks gave back 8 points to 2148 while the VIX ended higher to 17.26 after getting down to 16.23 on the earlier market highs.
Several Big Tech stocks led the way lower, and a large drop in AAPL was the heaviest weight on the market. It has been listless this week after unveiling several modest upcoming changes to the software that runs its devices.
Treasury yields eased after the May C.P.I. report showed that the tariffs are not pushing inflation much higher. But next month’s reports are going to show an increase because this report came out when crude oil prices were at their lows of $56 a barrel and since they have rallied strongly in June, this will be reflected higher with the release of the new numbers in mid-July.
U.S. consumers had to pay prices for food, gasoline and other costs of living that were 2.4% higher overall in May than a year earlier. That was up from April’s 2.3% inflation rate, but it wasn’t as bad as the 2.5% that was expected.
A fear has been that Trump’s wide-ranging tariffs could ignite an acceleration in inflation, just when it had seemed to get nearly all the way back to the Federal Reserve’s 2% target from more than 9% three summers ago. It hasn’t happened, though economists warn it may take months more to feel the full effect of Trump’s tariffs.
Financial markets also had only modest reactions to the conclusion of two days of trade talks between the United States and China in London.
It was stated that China will supply rare-earth minerals and magnets to the United States, while the U.S. government will allow Chinese students into U.S. universities in a deal that still needs an agreement by him and by China’s leader. Trump also said that “President XI and I are going to work closely together to open up China to American Trade. This would be a great WIN for both countries!!!”
Investors are still hoping for a more sweeping trade deal that would ease tensions between the world’s two largest economies.
Hopes for such deals between the United States and countries around the world have been one of the main reasons the S&P 500 has charged nearly all the way back to near its all-time high after dropping roughly 20% below a couple months ago. Without them, the fear is that Trump’s high tariffs could drive the economy into a recession while pushing inflation higher. The S&P 500 is now sitting 2% below its record.
CHWY dropped after the seller of pet supplies reported a weaker profit for the latest quarter than analysts had forecast. Expectations were high after its stock had already rallied nearly 37% coming into the day for the year so far.
TSLA swung between gains and losses before finishing with a rise of 0.1% to continue its shaky run. It has been recovering much of its big losses taken last week after Elon Musk’s relationship with Trump imploded, which in turn raised fears about a loss of business for the electric-vehicle company. Musk on Wednesday backed away from some of his earlier comments and said they went “too far” in what seems like some sort of questionable argument with the President to begin with.
Questionable GME, the once darling of the meme stock players went lower after its reports and is sinking even further today on the announcement of a large convertible notes offering largely to fund its Bitcoin buying aims.
In the bond market, the yield on the 10-year Treasury eased to 4.41% from 4.47% late Tuesday. Shorter-term yields, which more closely track expectations for what the Fed will do with overnight interest rates, fell more.
Earnings this week will see: yesterday: - GME, CHWY lower and PLAY higher; today – ORCL higher; tonight - ADBE.
Economic reports include: yesterday - May C.P.I came in at a rise of only 0.1% and year over year it was 2.4% while the core rate excluding food and energy was also higher by 0.1% and 2.8% year over year; today – May P.P.I. rose by 0.2% and 2.6% for the year while ex-food and energy also gained 0.1% and 2.7% year over year, weekly jobless claims gained 248K; Friday – May U. of Michigan Consumer Sentiment Survey.
By Don Selkin