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Stocks were mixed Thursday following a sizable sell-off on Wall Street as worries about a ballooning deficit deepened.

 

The 30-year Treasury yield hit its highest since October 2023 as lawmakers passed a bill that investors fear could worsen the US deficit.

 

The Dow Jones Industrial Average slipped 92 points, or 0.2%. The S&P 500 fell 0.1%, while the Nasdaq Composite advanced 0.2%.

Bank of England rate-setter Swati Dhingra said there was new evidence that Brexit had dealt a bigger blow to Britain’s services trade than previously realised.

 

Dhingra said on Thursday that early results from her research showed that UK services firms that were affected by trade barriers erected after Brexit have suffered a 8.5% fall in exports to the European Union relative to other developed countries.

 

“We’ve congratulated ourselves how well we’ve been doing on services exports,” Dhingra said at the Economic Statistics Centre of Excellence conference in London. “So has everyone else. We’re not exceptional. If anything, we’ve actually lagged behind.”

Northvolt AB will stop making cells at its last remaining factory in northern Sweden at the end of June, marking the demise of what was once Europe’s best hope of a homegrown battery champion.

 

An absence of buyers to save the battery maker led the trustee managing its bankruptcy estate to conclude production needs to wind down, according to a statement on Thursday that confirmed an earlier report by Bloomberg News.

 

“The bankruptcy estate does not foresee any realistic prospects for a purchaser to assume control of the production in the near term,” trustee Mikael Kubu said in the statement.

Federal Reserve Governor Christopher Waller said the central bank could cut interest rates in the second half of 2025 if the Trump administration’s tariffs on US trading partners settle around 10%.

 

“If we can get the tariffs down closer to 10% and then that’s all sealed, done and delivered somewhere by July, then we’re in good shape for the second half of the year,” Waller said Thursday during an appearance on Fox Business.

 

“Then we’re in a good position at the Fed to kind of move with rate cuts through the second half of the year,” he added.

 

Fed officials have held the central bank’s benchmark interest rate steady this year, citing an overall solid economy and uncertainty surrounding President Donald Trump’s tariff policies.

Deutsche Bank AG has reduced its exposure to companies that are sensitive to the new US tariffs, after the German lender conducted a series of internal stress tests.

 

“We have selectively reduced risk and customer limits in tariffs-sensitive sectors and downgraded individual customer ratings,” Chief Financial Officer James von Moltke told investors at the bank’s annual shareholder meeting.

 

Deutsche Bank said last month that it had added a “dedicated tariff overlay” to its credit provisions to account for the impact of the trade war and the worsening economic environment. Among the sectors most exposed are the automobile and steel industries, von Moltke said now.

 

“The overall quality of our loan book remains stable,” he told shareholders on Thursday.

Initial unemployment insurance filings edged lower last week, a further indication that companies are retaining workers.

 

Jobless claims totalled a seasonally adjusted 227,000 for the week ending May 17, a drop of 2,000 from the prior period and just below the Dow Jones estimate for 230,000, the Labour Department reported Thursday. The four-week moving average nudged higher to 231,500.

 

Continuing claims, which run a week behind, totalled 1.9 million, up 36,000 from the prior period. The four-week moving average rose to 1.89 million, its highest level since Nov. 27, 2021.

Oil declined for a third day with OPEC+ members discussing another super-sized production increase for July, just as demand faces headwinds from the US-led trade war.

 

Brent traded near $64 a barrel, touching the lowest in a week. If OPEC+ approves the potential increase of 411,000 barrels a day when it meets on June 1, it will mark the third month in a row the cartel has agreed to boost supplies by triple the initially scheduled amount.

France wants to keep building a “strong economic relationship” with Beijing, President Emmanuel Macron told Chinese counterpart Xi Jinping ahead of a trip to Southeast Asia.

 

“Chinese investment is welcome in France,” Macron said in a post on X on Thursday following a phone call with Xi. “But our companies must benefit from fair competition in our two countries, it’s a fundamental point.”

 

The French president said the two leaders agreed to make progress as quickly as possible on the question of Cognac.

Turkish President Recep Tayyip Erdogan signalled the potential revival of a state-backed loan guarantee program that previously triggered a surge in corporate lending, raising the prospect of looser financial conditions for businesses.

 

“I care about the Credit Guarantee Fund,” Erdogan told reporters on his return from a visit to Hungary, according to broadcaster NTV, adding that he had issued the “necessary warnings” to officials to activate the program.

 

A jump in lending could complicate the central bank’s efforts to maintain tight monetary policy and credit conditions as part of its ongoing inflation fight.

Xiaomi Corp.’s billionaire founder outlined plans Thursday to outfit its top-end devices with advanced homegrown mobile processors, showcasing the company’s ambitions to expand its tech portfolio and compete with American heavyweights.

 

Lei Jun, who shot to fame with bold plans to unseat Apple Inc. in China, gave online viewers a sneak peek at its Xring O1 chip, which he said would power three devices, including the Xiaomi Tablet 7 Ultra, another product launched at the same event, livestreamed from Beijing. At 3nm, that processor is aimed at matching Apple and Qualcomm Inc. chips.

 

“We also want to become one of the top chipmakers, with our phones targeting iPhones, can our chips also be compared against those of Apple’s?” he said.

Shares of Urban Outfitters surged 18% on Thursday morning after the apparel retailer reported quarterly results that were stronger than analysts had expected.

 

The firm posted earnings of $1.16 per share, exceeding the 84 cents per share consensus, per LSEG. Urban Outfitters’ revenue of $1.33 billion was also higher than the forecast $1.29 billion.

 

The company’s earnings beat comes at a time when tariff-induced uncertainty has mired the path forward for other retailers. Shares of Target sank 5% on Wednesday after the company cut its full-year sales outlook.

Tesco Plc’s chief executive officer for the UK Matthew Barnes stepped down after just over a year in the role, a surprise move by an executive once seen as a potential successor to lead Britain’s biggest grocer.

 

Barnes, who joined the supermarket in March 2024 after serving as Aldi’s UK & Ireland CEO, will be replaced by Tesco’s Chief Commercial Officer Ashwin Prasad next month, the grocer said in a statement Thursday.

 

The move comes as Tesco’s Group CEO Ken Murphy nears five years at the helm. Under his leadership, the company has grown its UK market share to almost 28%, well ahead of rival J Sainsbury Plc’s at 15%, according to research firm Kantar.

President Donald Trump’s signature tax bill narrowly passed the House Thursday morning, advancing a sprawling multi-trillion dollar package that would avert a year-end tax increase at the expense of adding to the US debt burden.

 

The bill now heads to the Senate, where groups of Republicans are pressing for extensive change. Lawmakers plan to vote on approval by August. It includes a $4 trillion increase in the US debt ceiling, which the Treasury Department forecasts could otherwise force a default as soon as August or September, adding urgency to the timeline.

 

The 215-214 House vote, with one abstention, was met with cheers from Republicans in the chamber. It followed a furious offensive by Trump, who visited the Capitol to rally Republicans, worked lawmakers by phone late into the night and summoned holdouts to the Oval Office. His budget office released a statement branding any GOP lawmaker who failed to support the package guilty of the “ultimate betrayal.”

Toronto-Dominion Bank said it will cut about 2% of its workforce as part of a restructuring program begun in the second quarter following its historic anti-money laundering settlement.

 

The bank, with about 95,000 employees, said the restructuring will cost up to C$700 million ($505 million) in pre-tax charges over the next several quarters, according to a statement Thursday. It expects the effort will generate about C$100 million in pre-tax savings this fiscal year and annual savings of up to C$650 million going forward.

 

Canada’s second-largest lender reported earnings that beat estimates after setting aside less money than expected for souring loans. It earned C$1.97 per share on an adjusted basis in its fiscal second quarter, topping the C$1.78 average analyst forecast. Provisions for credit losses totalled C$1.34 billion for the three months through April, less than the C$1.41 billion analysts had forecast.

There’s a crisis brewing for the next generation of venture capitalists. While Silicon Valley heavyweights like Sequoia Capital and Andreessen Horowitz are still able to bring in big checks, up-and-coming VCs are finding fundraising increasingly difficult.

 

Hundreds of small firms — which make up the majority of the VC industry — are struggling to raise money in the current market. Traditional investors in venture funds, like family offices and wealthy individuals, have pulled back thanks to high interest rates and economic uncertainty. Meanwhile, universities and their endowments have come under increasing financial pressure from House Republicans and the Trump administration.

Futures for the S&P 500 and Nasdaq 100 edged up by 0.1% and 0.2% respectively, while Dow Jones Industrial Average futures dipped 38 points, or 0.1%.

A global sell-off in bonds is gathering pace as investor unease over worsening fiscal outlooks intensifies. The trigger: a US credit rating downgrade by Moody’s and President Donald Trump’s proposed tax bill, which could potentially inflate the American deficit by up to $5 trillion.

Turkey’s central bank kept its year-end inflation forecast unchanged, saying the impact of March’s currency volatility on prices was limited following its monetary tightening.

Annual consumer inflation is expected to slow to 24% by the end of the year, unchanged from the previous forecast, Governor Fatih Karahan said at the central bank’s headquarters in Istanbul. The projection serves as a guide for policymakers aiming to reach a long-term inflation target of 5%. Markets expect year-end inflation to settle at 30.4%, according to the latest forecasts.

The bank also kept its inflation estimate for end-2026 unchanged at 12%.

Private-sector activity in the euro area unexpectedly shrank in May as services recorded their worst performance in 16 months.

The Composite Purchasing Managers’ Index by S&P Global fell to 49.5 from 50.4 in April, dipping below the 50 threshold separating expansion from contraction, data Thursday showed. Analysts had predicted a slight increase to 50.6.

“The euro-zone economy just cannot seem to find its footing,” Cyrus de la Rubia, an economist at Hamburg Commercial Bank, said in a statement. “While foreign demand for services is softening, it is the sluggish domestic demand that seems to be dragging the sector down.”

Germany’s private sector unexpectedly shrank in May as the worst result for services in two and a half years outweighed improvements in the manufacturing sector.

S&P Global’s Composite Purchasing Managers’ Index for Europe’s largest economy dropped to a five-month low of 48.6 from 50.1 in April, data Thursday showed. That’s below the 50 threshold separating growth from contraction. Analysts had anticipated a reading of 50.3.

“On the bright side, manufacturing is doing better,” Cyrus de la Rubia, an economist at Hamburg Commercial Bank, said in a statement. “In the service sector, by contrast, activity has taken a sharper tumble. And since services make up a big chunk of the economy, that drop has pulled overall activity into contraction.”

OPEC+ members are discussing whether to agree on another super-sized production increase at their meeting on June 1, potentially making it the third consecutive month in which the group would add extra barrels to the market.

An output hike of 411,000 barrels a day for July — three times the amount initially planned — is among options under discussion, although no final agreement has yet been reached, delegates said, asking not to be named because the information is private.

That’s the same amount that the cartel is adding to the market this month and next, having accelerated its planned supply revival in a bid to punish OPEC+ quota cheats by driving down prices. Group leader Saudi Arabia warned overproducing members at their last meeting that it could amplify a historic shift in policy and deliver further production increases unless they fall in line.

Bitcoin continued its rally on Thursday, hitting a brand new record high above $111,000.

Bitcoin hit $111,886.41 in early trading hours in London, according to Coin Metrics, before paring some of those gains to trade at around $111,012.00 at 07:03 AM in London.

Bitcoin’s move has been “driven by a mix of positive momentum, growing optimism around U.S. crypto regulation, and continued interest from institutional buyers,” James Butterfill, head of research for crypto-focused asset manager CoinShares, told CNBC by email.

UK government borrowing posted a surprise increase in the first month of the new fiscal year, providing Chancellor of the Exchequer Rachel Reeves little relief from the difficult budget backdrop she has faced since taking office.

The deficit in April was £20.2 billion ($27.1 billion), the Office for National Statistics said Thursday. The shortfall was £1 billion higher than a year earlier and well above the £17.9 billion median forecast of economists surveyed by Bloomberg. The Office for Budget Responsibility, the fiscal watchdog, will publish its monthly profile for 2025-26 later today.

The disappointing outturn came despite the controversial £26 billion hike in employer payroll taxes, which came into effect last month, and lower debt-interest costs. Receipts from compulsory social contributions, which includes National Insurance Contributions, were £1.7 billion higher than a year earlier. Debt costs were £500 million lower on the year at £9 billion.

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said his firm is committed to long-term investment in China, despite frailties between the governments of the world’s two biggest economies.

“We’re a long term investor here,” he said in a Bloomberg TV interview at the lender’s Global China Summit in Shanghai. “Yes, there’s all these other issues causing consternation, but we have to deal with the world that we have, not the world we want, and we’ll continue to grow.”

He also noted the country’s recent progress in some areas of technology.

JPMorgan Chase & Co. chief Jamie Dimon said he can’t rule out the US economy will fall into stagflation as the country faces huge risks from geopolitics, deficits and price pressures.

“I don’t agree that we’re in a sweet spot,” the chief executive officer said in a Bloomberg Television interview from the lender’s Global China Summit in Shanghai. He added that the US Federal Reserve is doing the right thing to wait and see before it decides on monetary policy.

Fed officials have held interest rates steady this year amid a solid economic backdrop and uncertainty about government policy changes — like tariffs — and their potential impact on the economy. Policymakers have said they see an increased risk of confronting both higher inflation and unemployment.

Lenovo Group Ltd. posted its fourth straight quarter of double-digit revenue growth, reflecting a growing lead in PCs as well as demand for AI servers.

The Chinese company reported a faster-than-anticipated 23% rise in sales to about $17 billion. But net income plunged a worse-than-expected 64% to roughly $90 million, reflecting a loss on derivatives and pricing pressures in a still-stagnant PC market.

Lenovo cemented its lead over HP Inc. and Dell Technologies Inc. in the first quarter, when it grew worldwide shipments almost 11%, according to IDC. Investors remain focused on AI server demand, given uncertainty about the macroeconomic outlook and sustainability of the artificial intelligence boom.

Tax incentives for clean electricity production are set to end years earlier then initially proposed in a new version of the giant tax and spending bill released by House Republicans on Wednesday night.

The revised text marked an extended effort to win over party dissidents, including fiscal hardliners who wanted deeper cuts to a series of tax credits created under former President Joe Biden’s signature climate law.

The revisions include ending technology-neutral clean electricity tax credits for sources like wind and solar starting in 2029 and requiring those projects to commence construction within 60 days of the legislation becoming law. The initial version proposed by House Republicans had a longer phase-out time, allowing many of the credits to exist until 2032.

A noted dove on the Bank of Japan’s policy board said there’s no need to make major changes to the bank’s plan for tapering bond purchases, a remark that comes a month before authorities unveil guidelines for bond buying in the period beyond April 2026.

“It is unnecessary at this point to make any major changes to the current plan,” BOJ board member Asahi Noguchi said Thursday in a speech in Miyazaki, southwestern Japan. “The bank will need to examine the reduction plan for April 2026 onward from a longer-term perspective.”

Noguchi spoke a day after the central bank concluded a series of hearings with market participants that will help it determine how fast to wind down its purchases at a time when concerns in the market have led to yield spikes, particularly among longer tenors. The BOJ will update its plans at a board meeting ending June 17.

The South Korean won climbed to a seven-month high late Wednesday after local media reported the direction of the currency was discussed during trade talks with the US.

The currency rallied after Korea Economic Daily cited an unnamed government official as saying the US believes a relatively weak won is a fundamental cause of the Asian nation’s trade surplus. The talks are ongoing and nothing has been decided yet, Korea’s finance ministry said in a statement.

The won advanced as much as almost 2% to 1,368.50 per dollar Wednesday, the strongest level since October. The currency unwound some of those gains Thursday, weakening 0.6%.

Nvidia CEO Jensen Huang said overnight that U.S. chip export controls are a “failure” and warned that the restrictions are doing more damage to American business than to China.

Huang said in a news conference at Computex, an artificial intelligence trade show in Taiwan, that the policies have cut the AI chip leader’s China market share from 95% to 50% and motivated Beijing to make its own chips faster.

Huang’s comments came as the truce between the US and China over tariffs and semiconductors continues to be delicate.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.