Market Day: Stocks climb above the turmoil

June 6, 2025

Orlando, FL – Trading Update

Uncertainties regarding the ongoing global tariff conflicts and concerns about the US economic outlook continue to unsettle investors.

However, stock indices across the US, Asia, Europe, and emerging markets have all made gains, pushing the MSCI World Index to a new all-time high.

This broad positive trend, though, masks some significant movements in specific assets. For instance, Tesla saw its stock plummet by 14% on Thursday, while Treasury yields dropped close to 15 basis points as they approached a three-year low.

Investors seem to be in a rather forgiving mood, placing their trust in policymakers to navigate through the complex waters of global trade tensions and manage US fiscal issues without causing major disruption.

This week, several key monetary policy decisions have been at play. The Bank of Canada appears to be holding steady, while the European Central Bank has lowered rates by a quarter percentage point, although the guidance remains relatively hawkish. As a result, both the Canadian dollar and the euro have gained strength.

In Switzerland, the central bank is apparently resisting pressure, as traders speculate on a return to negative interest rates by year-end. On the other hand, India’s Reserve Bank cut rates more than anticipated this Friday.

The Federal Reserve has largely maintained its stance, reflecting a “wait-and-see” approach amidst uncertainty about tariffs and their effects on growth and inflation. If the Fed decides to resume its easing measures, it seems that October might be the earliest opportunity.

As central banks are likely to enter a summer pause, attention shifts to the Trump administration’s trade discussions with major partners like China and Europe, especially as the July 9 deadline for mutual tariff suspensions approaches.

US President Donald Trump indicated a friendly tone during his 90-minute call with China’s Xi Jinping on Thursday, which was echoed in his subsequent meeting with German Prime Minister Friedrich Merz.

Yet, while the call to Xi is planned for next week in London, concrete outcomes haven’t materialized. The European Union’s dealings with Germany will proceed multilaterally rather than bilaterally.

Market Movements This Week

This week’s financial landscape has been quite eventful:

Tesla’s stock took a significant hit, displaying a 15% drop, which erased $155 billion from its market value. Despite a 27% rise this year, it was a tough week for the automaker.
Even with Tesla’s downturn, the Nasdaq climbed over 2% in two weeks, reflecting a rebound in US tech, while the MSCI World Index hit a record high with a 1.5% weekly increase.
Precious metals shone as silver surged by around 10%, marking its best week since September. Platinum followed suit, rising by 10% over a three-week period.
US crude oil futures jumped 6%, breaking the $64 mark this week, the largest increase since September, amidst ongoing concerns linked to US-China trade tensions.
US bond yields showed notable movement, with sell-offs influencing the curve, leading to the flattest spread in several months between the 2-year and 10-year yields.

Charts and Consumer Impact

This week’s focus included two specific charts related to tariffs:

The first illustrates the confusion surrounding tariffs since Trump took office.
The second, based on a New York Fed survey, reveals how US companies are passing on price increases to consumers, with nearly half of service companies charging 100% of tariffs to customers.