A public feud between Trump and Musk has begun in the US. RBI shifted its policy from accommodative to neutral

Wall Street closed lower on Thursday as investors grappled with the public feud between President Trump and Elon Musk, renewed trade uncertainty between the US and China, and growing signs of weakness in the labor market. At the end of Thursday, the Dow Jones Industrial Average (US30) index fell by 0.25%. The S&P 500 (US500) Index fell by 0.53%. The Nasdaq (US100) technology index closed down 0.80%. Tesla shares fell by 14.3% after Trump criticized Musk for his disagreement with a major tax and spending bill, suggesting that he could revoke government contracts and subsidies for Musk’s companies. Meanwhile, the number of applications for unemployment benefits rose to 247,000 last week, the highest in eight months, heightening concerns about a slowdown in labor market growth. Economists expect the May employment report to show an increase of 125,000 jobs, which is lower than the previous month and will keep the three-month average at 162,000.

Stock markets in Europe traded without a single trend yesterday. The German DAX (DE40) rose by 0.19%, the French CAC 40 (FR40) closed down 0.18%, the Spanish IBEX35 (ES35) added 0.73%, and the British FTSE 100 (UK100) closed 0.11% on Thursday. European stocks rose on Thursday after the European Central Bank (ECB) cut interest rates for the eighth time this year. The ECB lowered borrowing costs by 25 basis points and revised its inflation forecasts for 2025 and 2026 downward. Although the rate cut was largely anticipated, the sharper-than-expected downward revision of the inflation forecast for 2026 took some market participants by surprise. ECB President Lagarde acknowledged that the inflation outlook remains more uncertain than usual.

WTI crude oil prices traded around $63 per barrel on Friday, targeting a weekly gain of 4% — the first in three years — thanks to optimism about peak seasonal demand despite lingering concerns about oversupply. However, the bullish momentum weakened after Saudi Arabia signaled the need for a significant increase in production, calling on OPEC+ to raise output by at least 411,000 barrels per day in August and possibly in September to meet summer demand.

Silver prices (XAG/USD) held steady at around $36 per ounce on Friday, trading at their highest levels since February 2012, as weak US economic data and the Federal Reserve’s “dovish” outlook continued to stimulate demand for safe-haven assets. Expectations for a Fed rate cut in September have intensified after a series of disappointing indicators. The latest data showed an increase in jobless claims, a decline in private sector employment, and an unexpected slowdown in service sector activity, all pointing to signs of a softening labor market. Investors will now turn their attention to the upcoming non-farm payrolls report for further clarity on the economic outlook.

Asian markets traded without a clear trend yesterday. Japan’s Nikkei 225 (JP225) fell by 0.51%, China’s FTSE China A50 (CHA50) jumped 0.17%, Hong Kong’s Hang Seng (HK50) added 1.07%, and Australia’s ASX 200 (AU200) showed a negative result of 0.03% on Thursday.

On Friday, the New Zealand dollar held onto its recent gains, reaching $0.604 and remaining close to an eight-month high, thanks to renewed optimism about easing trade tensions, which reduced risks for the export-dependent currency. A telephone conversation between US President Donald Trump and Chinese President Xi Jinping, during which the two leaders agreed to resume trade talks, contributed to the positive sentiment. Domestically, markets expect the RBNZ to hold rates steady in July, while the probability of a rate cut in August is around 70%, potentially the last cut in this easing cycle.

Vietnam’s annual inflation rate rose to 3.24% in May 2025, a four-month high, from 3.12% in April. Meanwhile, core inflation, which excludes volatile items, rose to 3.33% from 3.14%, the highest since October 2023.

The Reserve Bank of India (RBI) unexpectedly cut its key repo rate by 50 basis points to 5.50% at its May meeting — more than the market had expected, which was anticipating a 25-basis-point cut — and shifted its policy stance from accommodative to neutral. As a result of Friday’s meeting, the total rate cut since February amounted to 100 basis points, bringing borrowing costs to their lowest level since August 2022. This decision was driven by lower inflation and ongoing uncertainty regarding global trade tensions.