US yields rise after latest tariff threat, data

NEW YORK – Longer-dated Treasury yields climbed on Monday after the latest tariff announcement from US President Donald Trump, while yields briefly pared gains after data on the manufacturing sector again showed contraction.

Trump said late on Friday he planned to increase tariffs on imported steel and aluminum to 50% from 25%, ratcheting up pressure on global steel producers and extending his trade war.

“In this environment, with the Federal Reserve on pause at this point, the economic data holding in there, the more recent big news items have been related to the deficit and then with trade, and both of those combined pushes yields higher,” said Jim Barnes, director of fixed income at Bryn Mawr Trust in Berwyn, Pennsylvania.

“If it starts to point in the other direction for the economy going downwards, then the long-end just based on where yields are today, I could see investors starting to move back in there as the economy becomes an area of concern again.”

The yield on the benchmark US 10-year Treasury note rose 4.2 basis points to 4.46% after earlier rising to 4.47% on the session.

Yields retreated slightly after the Institute for Supply Management (ISM) said its manufacturing PMI edged down to a six-month low of 48.5 last month from 48.7 in April. A reading below 50 signals contraction and it was the third straight month below that threshold.

“The tariff pause wasn’t a pause that refreshes, it’s probably because it’s not much of a pause, tariffs are still up,” said Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin.

“The pause was on the most punitive tariffs. Firms stocked up on inventory and are now destocking. The Fed may be in wait-and-see mode, but firms are just waiting, not knowing what they’ll see.”

Markets have been volatile since Trump announced a slew of tariffs on countries around the globe on April 2, only to then pause some and declare new ones.

Federal Reserve Governor Christopher Waller said on Monday, while speaking in Seoul, South Korea, that interest rate cuts remain possible later this year, even with the Trump administration’s tariffs likely to push up price pressures temporarily.

The yield on the 30-year bond rose 6.1 basis points to 4.993% after climbing to a high of 5.003%.

Economic survey data has shown expectations for higher inflation have grown as the tariffs are announced, while many Fed officials have indicated a patient approach to determine the effect the levies may be having on prices.

Federal Reserve Bank of Dallas President Lorie Logan said on Monday that inflation is still above the central bank’s target and the Fed is well-positioned to wait and be patient, with the key risk being if short-term inflation expectations become entrenched.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 51.7 basis points.

Markets are currently anticipating a cut from the Fed of at least 25 basis points likely to come at the central bank’s September meeting.

Chicago Federal Reserve Bank President Austan Goolsbee said the Fed was likely to lower rates after the uncertainty from tariff policies is cleared up.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, rose 2.7 basis points to 3.941%.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.393% after closing at a three-week low of 2.378% on May 30.

The 10-year TIPS breakeven rate was last at 2.344%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

Dollar mixed on tariff uncertainty, headed for monthly gain against yen

NEW YORK – The dollar was mixed on Friday but on track for the first monthly gain against the Japanese yen this year as investors factored in the likelihood of trade tariffs remaining in some form, even as US President Donald Trump faces a court battle over his authority to impose them.

A federal appeals court temporarily reinstated the most sweeping of Trump’s tariffs on Thursday, a day after a US trade court ruled that Trump had exceeded his authority in imposing the duties and ordered an immediate block on them.

While the exact level of tariffs that will remain on trading partners is unknown, traders expect the levies to persist in some form.

“We’re going to have some tariffing. Maybe not as exciting as was announced on April the 2nd, but we’re still going to get it,” said Steve Englander, head of global G10 FX research and North America macro strategy at Standard Chartered Bank NY Branch.

“The one thing that the court ruling may have done is limited the amount of shocks that Trump can unleash with a headline or with a comment at a press conference,” Englander said.

White House trade adviser Peter Navarro said on Thursday that the Trump administration will seek to enact tariffs through other means if it ultimately loses the court fights over its trade policy.

Investors are concerned that tariffs will slow growth and reignite inflation, though deals to drop tariff increases on China and the European Union as they negotiate trading terms have reduced pessimism over the US economic outlook.

The dollar briefly bounced on Friday after Trump said that China had violated an agreement on tariffs with the United States. A day earlier, Treasury Secretary Scott Bessent said that trade talks between the US and China were “a bit stalled.”

Trump later on Friday said he will speak to China’s President Xi Jinping and hopefully work out their differences on trade and tariffs.

Tariffs are seen as a key source of revenue as Congress works on a bill to reduce some income taxes.

The dollar showed little reaction to data on Friday showing that US consumer spending increased marginally in April as a rush to beat higher prices from import duties slowed, while inflation eased during the month.

A separate report showed that the US trade deficit in goods narrowed sharply in April as the boost from the front-running of imports ahead of tariffs faded.

“Nothing in the data was such a clear surprise relative to expectations that would generate a definitive market move,” said Englander.

May’s jobs report due for release next Friday will be closely watched for any indications that the labor market is weakening, after data on Thursday showed a bigger-than-expected jump in jobless claims in the latest week.

“Further USD weakness needs weaker data,” Bank of America analysts Athanasios Vamvakidis and Claudio Piron said in a report on Friday.

“If somehow the US economy keeps defying gravity, we would expect investors to start ignoring the policy noise and go back to buying US assets, supporting the USD; US exceptionalism would be back. However, if the US economy has a proper landing, we would expect the USD to weaken further to new lows for the year,” they said.

The euro was last down 0.12% at USD 1.1356. It is on pace for a 0.27% monthly gain, the smallest since February.

German inflation eased further in May, bringing it closer to the European Central Bank’s 2% target and bolstering the case for an interest rate cut next week.

The dollar weakened 0.21% to 143.88 Japanese yen. The greenback is on track for a monthly increase of 0.6% against the Japanese currency, the first green month since December.

Core inflation in Japan’s capital hit a more than two-year high on persistent rises in food costs, data showed on Friday, keeping the central bank under pressure to hike interest rates further.

(Reporting by Karen Brettell. Additional reporting by Johann M Cherian in Singapore and Linda Pasquini in Gdansk. Editing by Mark Heinrich, Mark Potter, and Nia Williams)

Jobs data, tax bill, trade on tap for rebounding US stocks

NEW YORK – Key US economic data, developments with federal tax-and-spending legislation and twists and turns on trade all are poised to influence equities in the coming week, with the US market closing in on record highs.

The S&P 500 ended on Friday with a weekly gain and less than 4% from its February all-time high. The benchmark index rose about 6.2% in May, while the Nasdaq Composite surged 9.6%, with both indexes tallying their biggest monthly increases since November 2023.

Investors at the end of the week were grappling with implications from legal rulings involving efforts to block most of President Donald Trump’s tariffs. Trump’s trade war has whipsawed global markets for weeks on concerns about economic fallout.

The coming week also brings a raft of economic and labor market data, headlined by the monthly US employment report out on Friday.

“Now that we’re back up here not all that far from the record high, I think the hard data needs to hold in better than the market expects to really advance from here,” said Scott Wren, senior global market strategist at the Wells Fargo Investment Institute.

The employment report for May is expected to show an increase of 130,000 jobs, according to a Reuters poll of economists, which would be a step down from growth of 177,000 the prior month.

Investors have been eager to learn how Trump’s tariffs may be rippling through the economy, especially in the wake of his April 2 “Liberation Day” announcement of sweeping levies on imports.

The May data represents a full month of “how businesses have been handling some of the tariff uncertainty and some of the pressures in the market,” said Anthony Saglimbene, chief market strategist at Ameriprise Financial.

Still, an overly strong employment report, such as growth of over 200,000 jobs, might be viewed warily by the market because it could delay interest rate cuts by the Federal Reserve, said Eric Kuby, chief investment officer at North Star Investment Management Corp.

Investors have reduced bets in recent weeks on the amount of expected Fed easing this year, with about two rate cuts priced in by December, according to LSEG data.

Minutes of their latest meeting released this week showed Fed officials acknowledged they could face “difficult tradeoffs” in coming months with rising inflation alongside rising unemployment.

Fiscal legislation in Washington will also be in focus. The Senate will start considering a tax-and-spending bill passed earlier this month by the House of Representatives. Trump said this week he plans to negotiate aspects of the “big, beautiful” tax bill, a day after billionaire Elon Musk said the bill detracts from efforts to reduce the US budget deficit.

The bill, which will add an estimated USD 3.8 trillion to the federal government’s USD 36.2 trillion in debt over the next decade, has focused attention on the impact of increasing deficits on the Treasury market. Rising bond yields have pressured stocks in recent weeks.

The shifting tariff backdrop also appeared likely to influence asset prices. Equities rebounded in recent weeks after Trump eased his harshest tariffs, but the situation remains in flux as Washington negotiates with trading partners.

On Thursday, for instance, stocks rose early the session after a US trade court blocked many of Trump’s tariffs, but gains faded during the session. Later, a federal appeals court reinstated the tariffs, further muddying the backdrop.

“There’s initial excitement and then the reality set in that this is just another step in this process and it really hasn’t clarified very much,” Kuby said.

(Reporting by Lewis Krauskopf; Editing by Alden Bentley and David Gregorio)

Japan’s Nikkei ends lower as court battle over US tariffs weighs

TOKYO – Japan’s Nikkei share price average ended lower on Friday, weighed down by uncertainty surrounding a court battle about US President Donald Trump’s tariffs as well as a stronger yen which hurt exporters.

The Nikkei index fell 1.22% to close at 37,965.1, having ended the previous trading session at its highest point in more than two weeks. It rose 2.17% over the week.

The broader Topix fell 0.37% to 2,801.57 and rose 2.41% for the week.

“Japanese shares rose yesterday on expectations that the impact of Trump’s tariffs on the global economy would be eased, but that positive mood was erased overnight,” said market analyst Shuutarou Yasuda at Tokai Tokyo Intelligence Laboratory.

A federal appeals court temporarily reinstated the most sweeping of Trump’s tariffs on Thursday, a day after a trade court ruled that the president had exceeded his authority in imposing the duties and ordered an immediate block on them.

The US dollar fell following the news, pushing the yen as high as 143.45 on Friday.

Strong inflation data on Friday for Japan’s capital also helped the yen to strengthen, strategists said.

Automakers fell, with Nissan Motor and Honda Motor slipping 3.13% and 1.87%, respectively. Toyota Motor erased early loss to end 1.26% higher.

A stronger yen typically weighs on exporter shares by reducing the value of overseas earnings when converted back into Japanese currency.

Chip-related shares fell, with Advantest and Tokyo Electron down 3.61% and 4.76% respectively, to drag on the Nikkei the most.

Bucking the trend, drugmakers rose, with Otsuka Holdings jumping 6.82% to provide the biggest support for the Nikkei.

Of more than 1,600 stocks trading on the Tokyo Stock Exchange’s prime market, 57% rose, 38% fell and 3% were flat.

(Reporting by Junko Fujita; Editing by Christopher Cushing)

Wall Street fears foreign tax in budget bill may reduce allure of US assets

NEW YORK/LONDON – Wall Street analysts are cautioning that a tax targeting foreign investors in the US budget bill progressing through Congress could end up weighing on demand for US Treasuries and the dollar.

The US House of Representatives has approved a sweeping tax and spending bill that includes the possibility of imposing a progressive tax burden of up to 20% on foreign investors’ passive income, such as dividends and royalties.

The levy, included in section 899, would be paid by entities such as sovereign funds and companies with businesses in the US or individuals from countries that impose taxes the US considers unfair, including digital service taxes.

“We see this legislation as creating the scope for the US administration to transform a trade war into a capital war if it so wishes,” George Saravelos, head of FX research at Deutsche Bank, said in a note on Thursday, adding the new tax could have an adverse impact on demand for US Treasuries.

If passed by the Senate, the rising tax rate on foreigners’ investments would come at a time global investors have started to question so-called “US exceptionalism,” or its unique ability to outperform other financial markets, due to a growing fiscal deficit and a new trade policy based on tariffs.

Financial services firm Brown Brothers Harriman (BBH) said in a note the new tax rate was “playing with fire.”

“It would deter foreign investment in US assets at a time when the country faces increasing reliance on foreign capital to finance its ballooning debt. Clearly, this is not good for the dollar,” said Elias Haddad, BBH’s senior markets strategist.

If it is also approved by the Senate, it could raise USD 116 billion in taxes over 10 years, the Congressional Budget Office said, based on estimates produced by the Joint Committee on Taxation. Still, revenues would be nearly flat in 2032 and the provision could turn into losses in 2033 and 2034, according to the calculations.

Nomura said there would likely be a push back against the new tax rate or negotiations to seek exemptions for Treasuries and agency mortgage-backed securities, as the bank considers the burden on overseas investors could have unintended consequences for those assets.

Rajeev Thakkar, chief investment officer and director at PPFAS Mutual Fund, said an increase in tax rates on investors “may reduce their appetite somewhat.”

DOLLAR WEAKNESS

Geoff Yu, EMEA macro strategist at BNY in London, said that based on his observation of investor flows, there had not been an immediate reaction.

“Treasuries are offering value right now – you’re getting higher yields, the dollar is weaker,” he said, which are both compensating for other factors.

US 10-year Treasury yields are trading at around 4.4%.

Others noted a more bearish longer-term outlook for US markets.

Morgan Stanley said in a note that the new tax would weaken the dollar, as it would reduce foreign appetite for US assets.

The US currency is down roughly 8% this year against a basket of other major currencies and is on track for its worst year since 2017.

According to law firm Davis Polk, nations that could be considered “discriminatory foreign countries” include many that are part of the European Union, as well as India, Brazil, Australia and the United Kingdom.

International companies with subsidiaries in the US, which employ 8.4 million workers, also fear the higher tax burden could make it more difficult to operate in the world’s biggest economy. In a recent statement, the Global Business Alliance, which represents foreign companies in the US, said a tax hike would threaten investments in the country.

The White House did not immediately comment on the impact of the new tax burden.

(Reporting by Carolina Mandl in New York; Additional reporting by Elisa Martinuzzi and Dhara Ranasinghe in London, Lewis Krauskopf in New York, Jaspreet Singh Kalra in Mumbai; Editing by Sonali Paul, Rachna Uppal, Mark Potter, and David Gregorio)

US yields dip as risk sentiment worsens amid China trade setback

NEW YORK – US Treasury yields slipped on Friday as risk sentiment worsened on concerns of a rekindling trade war with China after President Donald Trump said the world’s second-largest economy violated an agreement with the country on tariffs and trade restrictions.

In afternoon trading, the benchmark yield 10-year Treasury note fell to a two-week low and was last down 1 basis point (bp) at 4.414%. On the month, the note yield rose 24 bps, on track for its largest monthly gain since December, as investors fretted about the impact of tariffs on inflation.

Trump said on Friday that he made a “fast deal” in mid-May with Chinese officials for both countries to back away from triple-digit tariffs for 90 days. But a US official told Reuters that it appears China was moving slowly on promises to issue export licenses for rare earths minerals.

The Trump administration is now readying other actions targeting China, White House deputy chief of staff for policy Stephen Miller said on Friday.

Data showing benign inflation in April, meanwhile, had marginal impact on the market, with a measure of underlying price pressures posting its smallest annual increase in four years. The Personal Consumption Expenditures Price index (PCE), the Federal Reserve’s preferred inflation gauge, rose 0.1% in April and stood at 2.1% annually.

Fed policymakers will likely stick to their wait-and-see stance following the PCE data, with traders continuing to bet that by September the Fed will begin cutting rates gradually, bringing the policy rate down to 3.75%-4.0% by year’s end.

The Chicago Purchasing Managers Index released on Friday, meanwhile, was significantly below market predictions, showing businesses are cautious due to the tariffs. The index came in at 40 for this month, lower than a forecast for a 45 reading.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, fell 2.9 bps to 3.906%. On the month, the yield rose 29 bps, on track for its largest monthly rise since October last year.

“We had this week data showing inflation under control and signs of economic weakness, and good Treasury auctions,” said Lou Brien, market strategist at DRW Trading in Chicago. It may have been enough to get yields down from their peaks, but markets are still under the effect of uncertainty.

“For the most part, markets are reacting to the lack of clarity on what the tariff outcome will be and their influence on inflation,” he said.

FISCAL SUSTAINABILITY

Higher yields have been the norm for the month amid concerns about fiscal sustainability both in the United States and other developed countries, with signs of reducing demand for longer-dated government securities.

Yields also rose during the month amid the discussion of the budget and tax cut legislation in Congress. US 30-year yields fell to a more than one-week trough and were last up slightly at 4.926%.

For the month, 30-year yields advanced 25 bps, the biggest monthly gain since December.

Some worry there is the prospect of a longer-term crisis. JPMorgan Chase CEO Jamie Dimon expressed concern about a potential “crack” in bond markets during remarks at the Reagan National Economic Forum.

“I just don’t know if it’s going to be a crisis in six months or six years, and I’m hoping that we change both the trajectory of the debt and the ability of market makers to make markets”, he said. After saying a crisis is coming, Dimon added: “Unfortunately, it may be that we need that to wake us up.”

Next week, markets are expected to focus on developments in the trade negotiations with China, as well as the odds of enforcing high tariffs. A US trade court on Wednesday blocked most of Trump’s tariffs from going into effect in a sweeping ruling that the president overstepped his authority. They were temporarily reinstated by a federal appeals court on Thursday, further muddling the economy’s outlook.

Labor market data will also be important, according to DRW’s Brien. So far, there was not a spike in layoffs, but businesses have been very cautious in hiring.

(Reporting by Tatiana Bautzer, Ateev Bhandari, and Kanchana Chakravarty in Bengalaru; Editing by Sophie Walker, Gertrude Chavez-Dreyfuss, and Alan Barona)

US dollar drops as investors prepare for court battle on tariffs

NEW YORK – The dollar fell on Thursday as investors prepared for US President Donald Trump to battle a US trade court ruling on Wednesday that blocked most of his proposed tariffs.

A federal appeals court late on Thursday, however, reinstated Trump’s levies on imports. The order from the United States Court of Appeals for the Federal Circuit in Washington provided no opinion or reasoning but directed the plaintiffs in the case to respond by June 5 and the administration by June 9.

The greenback showed little reaction to the news. Senior Trump administration officials earlier downplayed the ruling’s impact, expressing confidence it would be overturned on appeal and insisting other legal avenues are available in the interim.

“Markets were quick to realize that the ruling was sort of narrow, meaning it was only focused on one aspect of the tariff plan here – emergency authorization,” said Brad Bechtel, global head of FX at Jefferies in New York. “There were still plenty of other avenues for Trump.”

The dollar had rallied on the ruling.

The US currency has weakened on concerns that tariffs will slow the economy and reignite inflation, while the erratic implementation of Trump’s policies is seen as denting the appeal of US assets to foreign investors.

“The deeper issue remains a persistent lack of clarity surrounding trade policy,” said Uto Shinohara, senior investment strategist at Mesirow Currency Management in Chicago.

The Federal Reserve has kept interest rates on hold on concerns about higher inflation as Fed officials wait to see how the trade policies will affect the US economy.

Trump, in a private meeting at the White House on Thursday, told Fed Chair Jerome Powell he was making a “mistake” by not lowering interest rates.

“This is not likely to be the end of tariff policy, and in some respects, if the administration wins its appeal or opts for alternative legal paths to tariff implementation, they could aim for the tariff agenda as a whole to be more entrenched than it was previously,” Goldman Sachs’ forex analysts said in a report on Thursday.

US economic pessimism declined earlier this week after Trump on the weekend delayed a plan to impose 50% tariffs on European Union imports.

The euro was last up 0.73% at USD 1.1374 after falling to USD 1.1209, the lowest since May 19.

Against the Japanese yen, the dollar weakened 0.57% to 143.99. It earlier reached 146.28, the highest since May 15.

The dollar fell 0.59% to 0.822 Swiss franc.

The greenback also weakened on news that the number of Americans filing new applications for jobless benefits rose more than expected last week, and the unemployment rate appeared to have picked up in May, suggesting increasing layoffs as tariffs cloud the economic outlook.

Investors are also watching the progress of a tax cut and spending bill that is working its way through the US Congress and which is expected to add trillions in US debt over the coming decade. Some Republicans have criticized it for not having enough spending cuts.

Trump’s budget chief said on Wednesday the White House intends to send Congress a package next week to formalize cuts made by billionaire Elon Musk’s team targeting federal government spending.

Longer-dated US Treasury yields rose last week and demand for the Treasury’s 20-year bond auction was soft due to rising concerns about the deteriorating US fiscal outlook.

The yen also weakened against the dollar earlier this week on reports that Japan will consider trimming issuance of super-long bonds in the wake of recent sharp yield increases in the country.

(Reporting by Karen Brettell; Additional reporting by Laura Matthews and Gertrude Chavez-Dreyfuss in New York, Rae Wee in Singapore, and Lucy Raitano in London; Editing by David Holmes, Richard Chang, and Sandra Maler)

US appeals court reinstates Trump tariffs, sowing market confusion

NEW YORK – A US appeals court reinstated President Donald Trump’s sweeping tariffs on Thursday, leaving Wall Street with no clear direction a day after most of the tariffs were blocked by a trade court, a move that had given markets a brief boost.

Chaotic US trade policy has sent global markets on a roller coaster in recent months. Equity markets were rattled by Trump’s April 2 “Liberation Day” tariff announcements, which have since been repeatedly delayed and adjusted.

Following a market revolt after the April 2 tariff shock, Trump paused most import duties for 90 days and vowed to hammer out bilateral deals with trade partners.

Markets have swung wildly through Trump’s on-and-off tariff changes. The S&P 500 index is up 4.1% since duties were announced while European stocks have gained 2.0%.

Gold is up 5.9% from April 2, and the US dollar index is down 4.4%. Ten-year Treasury yields have climbed 23 basis points to around 4.4%.

But US stocks showed little reaction to the appeals court decision, having already pulled back from the rally sparked by Wednesday’s trade court ruling.

Markets have grown accustomed to the president announcing steep tariffs only to postpone them soon afterward, giving rise to the acronym TACO (Trump Always Chickens Out), coined by the Financial Times.

Asked on Wednesday by a reporter for his response to the term TACO, Trump said the question was “nasty” and in his defense of tariff changes, said: “It’s called negotiation.”

“Trump has already rolled back most of these tariffs anyway, so these court rulings are just headlines,” said Adam Sarhan, chief executive of 50 Park Investments in New York.

“As far as I’m concerned, as long as the market doesn’t tank on the news, it’s just a secondary byproduct,” Sarhan added.

The Dow Jones Industrial Average rose 117.03 points, or 0.28%, to 42,215.73, the S&P 500 gained 23.62 points, or 0.40%, to 5,912.17, and the Nasdaq Composite gained 74.93 points, or 0.40%, to 19,175.87.

(Reporting by the Asia markets team; additional reporting by Stephen Culp and Caroline Valetkevitch in New York and Dhara Ranasinghe in London; Writing by Rocky Swift. Editing by Sam Holmes, Ros Russell, and Nia Williams)

Wall Street ends up with Nvidia, appeals court reinstates Trump tariffs

NEW YORK – US stocks ended higher on Thursday as shares of Nvidia gained after its quarterly results, while investors digested a late-afternoon court ruling that reinstated the most sweeping of President Donald Trump’s tariffs.

The appeals court ruling came a day after a trade court had ordered an immediate block on the tariffs.

Trading was choppy for much of the day and indexes ended well off their highs of the session, however, with investors trying to digest the rulings, and as shares of Salesforce fell 3.3%. Salesforce’s stock was down even as the enterprise software provider raised its annual revenue and adjusted profit forecasts.

“Trump has already rolled back most of these tariffs anyway, so these court rulings are just headlines,” said Adam Sarhan, chief executive of 50 Park Investments in New York.

“As long as the market doesn’t tank on the news, it’s just a secondary” thing, he said.

Nvidia gained 3.2% after the company late on Wednesday reported upbeat sales results, driven by customers stockpiling AI chips ahead of US export restrictions on China.

The company, however, warned that the new curbs are expected to cut USD 8 billion from its current-quarter sales.

Optimism about corporate earnings and Nvidia in particular is providing some support, said Oliver Pursche, senior vice president, adviser for Wealthspire Advisors in Westport, Connecticut.

“It’s about corporate earnings in general,” he said.

Nvidia, which is now up just 3.6% for the year, was the last of the “Magnificent Seven” megacap tech and growth companies to report results for this earnings period.

Trade developments have whipsawed the stock market this year, especially after Trump’s April 2 announcement of sweeping tariffs on imports globally.

The S&P 500 has rebounded from a selloff in early April as trade tensions have eased and as first-quarter earnings have been mostly better than expected. The index is now up 0.5% for 2025 but off its February record high.

Still, investors have become accustomed to Trump announcing steep tariffs, only to postpone them soon afterward. That has led to the acronym TACO (Trump Always Chickens Out), coined by the Financial Times.

“It’s cute; it’s not a strategy,” said Pursche, referring to the acronym.

“However, from a purely American business perspective, there have been incremental gains achieved by the Trump administration on trade, and that shouldn’t be ignored.”

Boeing rose 3.3% after CEO Kelly Ortberg said the planemaker aims to increase production of its best-selling 737 MAX jets to 42 aircraft per month in the next few months and boost output to 47 a month in early 2026.

On the economic front, a second reading from the Commerce Department showed gross domestic product contracted 0.2% in the first quarter. Economists polled by Reuters had forecast a 0.3% contraction.

In other earnings-related news, Best Buy shares fell 7.3% after the electronics retailer lowered its annual comparable sales and profit forecasts amid concerns that US tariffs would weigh on consumer demand for big-ticket items.

Advancing issues outnumbered decliners by a 2.26-to-1 ratio on the NYSE. There were 114 new highs and 35 new lows on the NYSE.

On the Nasdaq, 2,673 stocks rose and 1,806 fell as advancing issues outnumbered decliners by a 1.48-to-1 ratio.

Volume on US exchanges was 18.65 billion shares, compared with the 17.7 billion average for the full session over the last 20 trading days.

(Reporting by Caroline Valetkevitch in New York; Additional reporting by Shashwat Chauhan and Kanchana Chakravarty in Benglauru; Editing by Pooja Desai, Maju Samuel, and Matthew Lewis)

Yields drop in choppy trading after court blow to Trump tariffs

NEW YORK – US Treasury yields fell on Thursday on soft economic data and on the back of a court ruling blocking most of President Donald Trump’s tariffs, which initially boosted risk sentiment in markets before reigniting fears over prolonged trade policy uncertainty.

A US trade court blocked most of Trump’s tariffs in a sweeping ruling on Wednesday that found the president overstepped his authority by imposing across-the-board duties on imports from US trading partners. On Thursday afternoon, a U.S appeals court reinstated the tariffs during the appeal.

Treasury yields, which rise when prices fall, jumped overnight as US stock futures rallied, but the bond selloff lost steam in early trade on Thursday, with yields then turning lower after the release of weekly jobs data and first-quarter gross domestic product estimates that showed underlying weakness in the economy.

“Overnight, once you first got the news, equity markets took off, yields sold off, then I think there was a more nuanced reaction to it,” said Noel McElreath, senior portfolio manager for US fixed income at Xponance.

Economists largely expect tariffs to be a drag on economic growth and to increase price pressures, therefore potential relief from higher import duties would be less inflationary, which would be positive for the bond market. At the same time, lower tariffs than anticipated could reduce revenues, potentially intensifying concerns over the US fiscal health.

For the time being, after the Trump administration filed a notice of appeal and questioned the authority of the court, investors will have to contend with heightened uncertainty over the final shape of US trade policies.

“Is it really a coast clear? Trump never goes down without punching so I would imagine there’s going to be another few weeks of some chaotic headlines,” said John Luke Tyner, head of fixed income and portfolio manager at Aptus Capital Advisors.

On the economic front, data from the Labor Department on Thursday showed the number of Americans filing new applications for unemployment benefits increased more than expected last week, while the jobless rate appeared to have picked up in May as labor market conditions continue to ease.

A second reading from the Commerce Department showed gross domestic product contracted 0.2% in the first quarter, less than a 0.3% forecast by economists polled by Reuters, but consumer spending was weaker.

“The data is getting more dovish, even with GDP revised up a bit,” David Russell, global head of market strategy at TradeStation, said in a note. “Consumer spending was weaker than expected … These numbers may increase odds of rate cuts sooner rather than later.”

The probability the Federal Reserve would cut rates by 25 basis points to a 4%-4.25% range at its September meeting increased to 53% on Thursday from 48% on Wednesday, CME Group data showed, with a total of two 25-bps cuts priced in for 2025.

Trump, in a private meeting at the White House on Thursday, told Fed Chair Jerome Powell that he was making a “mistake” by not lowering interest rates, delivering in person a view he has expressed publicly for months now. Powell at the meeting emphasized that monetary policy depends on economic data, the Fed said in a statement.

Meanwhile, without commenting directly on the tariff court ruling, Chicago Fed President Austan Goolsbee on Thursday said that if big tariffs could be avoided, either through trade deals or otherwise, the US central bank could likely cut interest rates given the underlying strength of the economy and the direction of inflation.

Benchmark 10-year yields were last at 4.426%, about five basis points down on the day. Two-year yields fell by roughly the same amount to 3.941%.

On Thursday, the Treasury Department sold USD 44 billion seven-year notes in the last leg of this week’s Treasury auctions, which included two-year and five-year notes and met good demand.

The seven-year notes were sold with a high yield of 4.194%, over two basis points below the market at the time of bidding in a sign that investors were willing to pay up to secure them.

(Reporting by Davide Barbuscia; Editing by Emelia Sithole-Matarise and Will Dunham)

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