Morning in New York: foreign trade rhetoric adds to uncertainty

Daily review and forecast of events on the US stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

This Tuesday, the investment community will focus on the continuation of the dialog on mutual trade between the USA and China in London. After six hours of talks on Monday, the heads of the US Treasury Department and Commerce Department gave moderately positive assessments of their interim outcomes. President Donald Trump also reported «good news» but emphasized that «China is not easy.»

The Chinese delegation led by Vice Premier He Lifeng did not comment. Beijing's restrictions on supplies of rare earth metals and Washington's export controls on technology remain key topics of discussion. Both sides are using strategic leverage: the U.S. is increasing restrictions on ethane, an important ingredient for plastics production that is almost entirely imported by China. China continues to curb exports of rare earth metals critical to the auto and high-tech industries. The White House also continues to push for speedy trade agreements with India and the EU. All these factors combine to form an uncertain backdrop and increase market volatility.

The US Treasury Department will issue a total of $169 billion in debt this week, with auctions of $57 billion, $78 billion and $34 billion in three-year, ten-year and 30-year treasuries on Tuesday, Wednesday and Thursday, respectively. It will be important for investors to see the sustainability of demand for U.S. debt in the face of increasingly tough rhetoric from the authorities on taxes and trade barriers.

This Tuesday, the NFIB Small Business Optimism Index for May will be released. However, this release will not have a decisive impact on the upcoming trading;

Quarterly reporting after the close of the main session will be presented by Gamestop (GME), GitLab (GTLB) and Stitch Fix (SFIX).

Futures on S&P 500 shows consolidation. Macroeconomic and corporate calendar assume calm background, however important statements on results of trade negotiations can strengthen amplitude of share fluctuations. Taking into account these factors, we forecast a high level of volatility at the upcoming session with a neutral balance of risks. We focus on S&P 500 movements in the range of 5920-6090 points (from -1.4% to +1.4% relative to the closing level of the previous session).

- Bloomberg reported that CEO Meta Platforms (META) CEO Mark Zuckerberg is forming a team of experts to create a general artificial intelligence.

- Ryanair (RYAAY) announced a $500 million investment in 30 engines as part of a plan to expand its fleet to 800 Boeing (BA) 737 aircraft by 2034.

- TSMC (TSM) revenue rose nearly 40% YoY in May amid robust demand for AI chips.

- Morgan Stanley (MS) is preparing a $5 billion debt offering for Ilon Musk's xAI startup, despite his escalating political differences with Donald Trump.

Trading on June 9 on U.S. stock exchanges ended mostly in the green zone. S&P 500 rose by a symbolic 0.09%, Nasdaq 100 rose by 0.17%, Dow Jones showed zero dynamics, Russell 2000 added 0.57%. Most of the «Magnificent Seven» stocks were moving upward. The exceptions were Apple (AAPL) and Meta (META). Most of the sectors that make up the broad market index closed in positive territory. Durable goods producers (XLY: +0.8%) were the top gainers, while utilities (XLU: -0.64%) were the outsiders.

US wholesale inventories in April rose by 0.2% mom to $908.7 bln, exceeding the preliminary estimate and reflecting the recovery in the non-food segment (+0.3%). The clothing, food and pharmaceuticals categories showed particularly pronounced positive dynamics.

Consumer inflation expectations for the year ahead, according to the FRB of New York, fell to a three-month low of 3.2%, signaling a gradual easing of inflation pressures. A slowdown in price growth is expected for most groups of goods and services, but the benchmark for the cost of food was raised to +5.5%.

- Shares of Tesla (TSLA: +4.6%) rose after Trump's statements of support for Starlink and wishes for success for Ilon Musk.

- Synchrony Financial (SYF: +2.7%) is launching a joint credit card with Walmart that will be integrated into the OnePay app.

- IonQ (IONQ: +2.7%) announced the acquisition of startup Oxford Ionics for $1.075 billion (the deal will be paid in cash and stock).

- Quotes of Synopsys (SNPS: +2.0%) rose amid reports of a partial restoration of access to EDA software for Chinese companies following a phone call between Trump and Xi.

- Warner Bros. Discovery (WBD: -3.0%) confirmed plans to split the business into a streaming company and cable TV networks by mid-2026.