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Wall Street traders parsing a deluge of economic reports sent bond yields lower on speculation that tame inflation will keep the Federal Reserve on track to cut interest rates this year.

Treasuries climbed across the curve, with traders slightly increasing bets on two rate reductions by the end of 2025. That was after a reading on producer prices unexpectedly declined by the most in five years.

Separate data showed retail sales barely rose. Stocks remained lower in early trading after a rapid surge from April’s lows started showing signs of exhaustion.

Prices paid to US producers unexpectedly declined in April by the most in five years, largely reflecting a slump in margins, suggesting companies are absorbing some of the hit from higher tariffs.

The 0.5% decrease in the producer price index followed no change in March, Bureau of Labor Statistics data showed Thursday. The median forecast in a Bloomberg survey of economists called for a 0.2% gain. Excluding food and energy, the PPI declined 0.4% — the most since 2015.

Stripping out food, energy and trade, a less-volatile measure favoured by many economists, prices fell 0.1%, the first decline in five years. Compared with a year ago, the gauge rose 2.9%.

The figures suggest American manufacturers and service providers are so far refraining from passing along higher US duties on imports. The impact on consumers has also been modest, even as producers are feeling the pinch from aggressive levies on imported materials and other inputs.

Federal Reserve Chair Jerome Powell said Thursday that longer-term interest rates are likely to be higher as the economy changes and policy is in flux.

In remarks that focused on the central bank’s policy framework review, last done in the summer of 2020, Powell noted that conditions have changed significantly over the past five years.

During the period, the Fed witnessed a period of surging inflation, pushing it to historically aggressive interest rate hikes. Powell said that even with longer-term inflation expectations largely in line with the Fed’s 2% target, the era of near-zero rates is not likely to return anytime soon.

“Higher real rates may also reflect the possibility that inflation could be more volatile going forward than in the inter-crisis period of the 2010s,” Powell said in prepared remarks for the Thomas Laubach Research Conference in Washington, D.C. “We may be entering a period of more frequent, and potentially more persistent, supply shocks — a difficult challenge for the economy and for central banks.”

UnitedHealth Group Inc. tumbled in early trading on a report it was under criminal investigation for possible Medicare fraud, adding to an already tumultuous week for the insurer.

The Justice Department has had a probe into the company’s Medicare Advantage business since at least last summer, the Wall Street Journal reported, citing unidentified people familiar with the matter.

UnitedHealth said in a statement late Wednesday that the Department of Justice hadn’t notified the company about the reported investigation. “We stand by the integrity of our Medicare Advantage program,” it added.

Top European diplomats accused Russian President Vladimir Putin of undermining talks with Ukraine aimed at securing a halt to his war as the prospects for a potential meeting between the two sides in Turkey remained uncertain.

The Kremlin’s appointment of a low-level delegation to take part in the negotiations in Istanbul on Thursday showed that Putin is trying “to play for time,” Polish Foreign Minister Radoslaw Sikorski told reporters as NATO top diplomats gathered in Turkey’s Antalya. “We hope that the President of the United States sees this mockery for what it is and draws the right conclusions.”

Wall Street was heading for a pullback on Thursday, and tech stocks fell as investors worried about an economic slowdown and overheated markets. Oil slumped more than 3%.

S&P 500 futures slid 0.5%, with Nvidia Corp., Palantir Technologies Inc. and Tesla Inc. falling about 2% in early trading. The dollar weakened, and US bonds were steady. Brent sank below $64 a barrel after President Donald Trump said the US is getting closer to a deal on Iran’s nuclear program, fueling concern that additional oil supply may pressure the market.

Walmart on Thursday fell just short of quarterly sales estimates, as even the world’s largest retailer said it would feel the pinch of higher tariffs.

Even so, the Arkansas-based discounter stuck by its full-year forecast, which calls for sales to grow 3% to 4% and adjusted earnings of $2.50 to $2.60 per share for the fiscal year. That cautious profit outlook had disappointed Wall Street in February.

Dick’s Sporting Goods Inc. reached a $2.4 billion deal to acquire Foot Locker Inc., combining two retailers saddled by President Donald Trump’s tariff wars.

Dick’s will pay $24 a share for Foot Locker, which implies an equity value of $2.4 billion and an enterprise value of $2.5 billion, the two

companies said in a statement.

Shares in Foot Locker extended gains to surge as much as 83% in premarket trading on Thursday. Meanwhile, Dick’s Sporting fell as much as 13% in trading before the bell.

Alibaba shares fell on Thursday after the Chinese e-commerce giant missed earnings expectations for its fiscal fourth quarter on both the top and bottom line.

Shares were down 5% in premarket trade in the U.S. at 6:02 a.m. ET. While falling short of analyst expectations, revenue was nevertheless up 7% year-on-year.

Alibaba’s net income was also still 279% higher year-on-year, off a low base. Alibaba said it saw some losses as a result of the disposal of some of its subsidiaries, which was offset by an increase in income from operations and changes to valuations of its equity investments.

However, analysts were hoping the company’s investments in artificial intelligence and its core e-commerce business would help it hit or exceed high expectations.

Oil fell for a second day after President Donald Trump said the US and Iran are getting closer to a deal on the country’s nuclear program.

Brent dropped below $64 a barrel, losing as much as 3.9% in London. US crude futures also slid and oil companies led declines in European stock markets.

“I think we’re getting close to maybe doing a deal,” Trump told reporters in Doha.

Earlier, prices fell as NBC reported Tehran was willing to commit to not having nuclear weapons in exchange for sanctions relief, reiterating the country’s long-held position. In his remarks, Trump cited a news report saying Iran has agreed to terms, without elaborating.

Japan’s biggest banks expect another year of record profits and unveiled plans to buy back shares, even as they warned that trade tensions may hurt business and economic growth.

Mitsubishi UFJ Financial Group Inc. sees net income jumping 7.5% to ¥2 trillion ($13.7 billion) for the 12 months ending March, the nation’s largest lender said Thursday. Mizuho Financial Group Inc. expects a 6.1% increase to ¥940 billion, while Sumitomo Mitsui Financial Group Inc. anticipates a 10% gain to ¥1.3 trillion.

“High uncertainty” makes it challenging to project the impact of trade policies on economies, the business environment and performance, MUFG said in a presentation that listed risks ranging from stagflation to a loss of trust in the dollar.

European stocks have opened firmly in negative territory as investors digest earnings updates from a number of companies across the continent.

The Stoxx Europe 600 and France’s CAC 40 were lower by 0.4%, while the UK’s FTSE 100 and Germany’s DAX were in the red by 0.5% at 8.25 a.m. in London.

Elsewhere in the currency markets, the British pound strengthened by 0.2% after better-than-expected UK gross domestic product figures for the first quarter.

Thyssenkrupp AG shares tumbled after the steel and engineering group reported a slump in earnings due to weak demand from automotive and industrial customers.

Adjusted earnings before interest and tax dropped to €19 million ($21.3 million) in the latest quarter, from €184 million a year earlier, the German company said Thursday. That was driven by lower sales, reduced shipments and a significant drop in capacity utilization due to maintenance work at its capital-intensive steel unit.

Thyssenkrupp shares fell as much as 14% in early Frankfurt trading on Thursday. The stock has more than doubled this year as it benefits from rising defense spending in Europe.

– Very important step to establish a relationship with China

– We now have a mechanism with China counterparts

– We can accomplish a lot over the next 90 days

US and Chinese officials met for trade talks in South Korea on Thursday, just days after both sides met in Switzerland and agreed to pause some tariffs for 90 days.

US Trade Representative Jamieson Greer sat down with China’s chief trade representative Li Chenggang in Jeju, South Korea, according to a South Korean official with knowledge of the matter. No other details have been provided yet and the US Embassy in Seoul didn’t immediately respond to a request to confirm the meeting.

The truce in the ongoing trade war between the world’s two largest economies has brought some relief to companies, many of which have been hit hard by rising costs due to the tit-for-tat tariffs. Still, the suspension is only temporary, and firms also have to consider what happens to tariffs affecting South Korea, Japan, Vietnam and other nations that the US announced and then suspended.

The UK economy grew 0.7% in the first quarter of 2025, according to a preliminary estimate from the UK’s Office for National Statistics released on Thursday.

Economists polled by Reuters had expected the country’s gross domestic product (GDP) to expand by 0.6% over the period, up from the 0.1% and zero growth in the fourth and third quarters, respectively.

The ONS said first-quarter growth “was driven by an increase of 0.7% in the services sector, production also grew, by 1.1%, while the construction sector showed no growth.”

Siemens AG’s revenues rose in the first three months of the year, driven by a recovery in factory-automation sales in China and larger orders for trains in the US and Europe.

Group revenues increased 6% to €19.8 billion in its fiscal second quarter, the company said Thursday. The German manufacturer confirmed its overall guidance of as much as 7% revenue growth this year.

Siemens’ results were buoyed by Chinese orders for its products that help control factory production as companies worked down long-elevated stock levels. The rebound helped offset a decline in Germany, where manufacturers have been struggling to compete amid higher production costs.

Shein Group Ltd. lowered US retail prices this week after the Trump administration temporarily cut duties on Chinese imports, as the online fashion retailer moves to win back consumers scared away by recent tariff-induced price hikes.

The average cost of 98 products consistently tracked by Bloomberg News on Shein’s website was $5.56 on Wednesday, down about 13% from a May 7 peak of $6.38.

Shein also sent a price drop alert to US consumers Wednesday touting lowered prices across a range of styles, and promising that shoppers wouldn’t be asked to pay any tariff-induced fees or additional costs at checkout. PDD Holdings Inc.-owned rival Temu adopted import surcharges for goods shipped directly from China in late April.

Taiwan said the latest review of US Treasuries positions at its state-backed banks and their internal risk-management measures have so far found no major issues.

The island’s Finance Ministry in April asked nine state-backed banks to report their exposure to US government bonds, risk management mechanisms and protocols, in response to public concerns over US assets.

So far, there were no major issues with the Treasuries exposures of the banks that would require authorities to take further measures, a ministry official said by telephone on Thursday. It hasn’t conducted any additional reviews since April and has no plans for more reviews or for there to be regular check-ups, the official said.

Xiaomi Corp. electric vehicle sales in China have taken a hit since March after a fatal highway accident and consumer unhappiness around the marketing of one version of its car.

Orders for Xiaomi’s SU7 sedan plunged to around 36,000 units in April, down 55% month-on-month, Deutsche Bank AG wrote in a note. “This trend extended into May,” auto analysts led by Bin Wang said.

Deliveries are also suffering, the investment bank said, with volumes down sequentially over the past four weeks, from 7,200 in the third week of April to just 5,200 units in the second week of May.

China has suspended a ban on exports of items with both military and civil applications — likely including some rare earths — to 28 US companies as part of the trade detente struck between the world’s two largest economies.

The move follows an agreement by China and US to temporarily lower tariffs levied against each other’s products — the first major de-escalation in the trade row that was touted by US President Donald Trump as a “total reset” of bilateral ties. Stocks and the dollar surged as prospects of a resolution offered relief to investors.

The announcement from China’s Ministry of Commerce puts a 90-day pause on restrictions unveiled by Beijing in statements on April 4 and April 9, banning the export of so-called dual-use items to a total of 28 named US entities.

The Chinese central bank’s latest monetary easing has triggered a fresh rally in local corporate bonds, sending risk premiums to a record low as investors ramped up leveraged bets.

Yields on one-year AA rated onshore company notes are 41 basis points above those on comparable government debt, turning the so-called credit spread into the tightest since 2007 when Bloomberg-compiled data became available. Risk premiums on similar AAA rated corporate bonds and negotiable certificates of deposit, a popular funding tool for banks, also reached their narrowest since 2022.

Debt instruments with a rating of AA or below are generally considered speculative or junk in nature in China’s onshore market, where credit scores issued by local risk assessors tend to be more lenient and inflated.

Gold steadied after falling more than 2% Wednesday on signs there will be fewer Federal Reserve rate cuts than previously anticipated, and as easing US-China tensions sapped haven demand.

Bullion traded above $3,182 an ounce on Thursday, near the lowest level in more than a month. Yields on US Treasuries climbed on expectations the Fed will lower borrowing costs later than thought due to an improving economic outlook following the US-China trade truce. Higher yields and rates tend to be negative for non-interest bearing gold.

Continued progress in US-led trade talks also added to bearish headwinds for the precious metal, with China suspending curbs on exports of rare earths and other goods and technologies on Wednesday. The detente between the world’s two largest economies has reduced gold’s haven appeal and led to a sharp rebound in risk assets this week.

Starbucks Corp. has contacted private equity firms, technology companies and others as it considers options for its China business, including a possible stake sale, according to people familiar with the matter.

The coffee chain sent out letters via a financial adviser to several potential investors this week to solicit views on the China business and how to grow it, the people said, asking not to be identified because the process is private. A transaction could value the assets at several billion dollars, the people said.

Bloomberg News reported previously that Starbucks was assessing its operations in China, its second-biggest market. The company has warned of macroeconomic and competitive pressures in the country, where the likes of Luckin Coffee Inc. and Cotti Coffee have emerged as major homegrown players.

The trade truce is not enough to ignite a rush into Chinese financial assets amid expectations of reduced policy stimulus and lingering uncertainty on a final deal.

While Chinese stocks have rallied following the agreement, recouping their losses since the April 2 volley of tariff announcements, global investors appear to be staying on the sidelines. Market expectations on further government support have been tempered given the better-than-expected outcome of tariff negotiations last weekend.

“The upside appears limited unless we see further policy support or a clear improvement in earnings, as much of the recent good news is already reflected in prices,” said Eva Lee, head of Greater China equities at UBS Global Wealth Management. “Major headwinds would be the negotiation takes longer than expected while China didn’t offer effective stimulus measures to stabilize the economy.”

UnitedHealth Group Inc. is under criminal investigation for possible Medicare fraud, the Wall Street Journal reported, citing unidentified people familiar with the matter.

The Justice Department has had a probe into the company’s Medicare Advantage business since at least last summer, according to the people.

The nature of the potential criminal allegations against the insurer isn’t clear, the newspaper reported, citing the people. UnitedHealth’s shares fell more than 8% in postmarket trading in New York.

Dick’s Sporting Goods Inc. is in advanced talks to buy Foot Locker Inc., whose stock had dropped 41% this year amid the back-and-forth over tariffs, according to people familiar with the matter. The stock surged 69% in extended trading.

Under the transaction being discussed, Dick’s would pay $24 a share for Foot Locker, one of the people said. A deal could be announced as soon as Thursday, said the people, asking not to be identified because the talks were private.

Foot Locker shares closed at $12.87 on Wednesday, giving the company a market value of $1.22 billion. The stock surged more than 60% in extended trading in New York after the Wall Street Journal reported talks for what would be a $2.3 billion deal.

Oil fell for a second day following a report Iran is willing to forgo nuclear weapons in a deal with the US in exchange for sanctions relief.

Brent dropped toward $65 a barrel, after declining 0.8% on Wednesday, while West Texas Intermediate traded near $62. Iran is ready to sign an agreement with certain conditions, NBC reported, citing Ali Shamkhani, a top adviser to the OPEC nation’s supreme leader.

Crude declined Wednesday after government data showed US stockpiles rose the most since March, ending a four-day rally that had seen it gain almost 10%. The advance had been driven by the trade truce between China and the US and President Donald Trump’s increasingly hostile rhetoric on Iranian supply.

Stocks in Asia fell on Thursday for the first time in five sessions as the rally on Wall Street sparked by US-China trade talks showed signs of exhaustion.

Japanese and Australian stocks edged lower, while a gauge of US-listed Chinese companies climbed 1.2% on Wednesday. Tencent Holdings Ltd.’s revenue grew at its fastest pace in more than three years.

An index of the dollar rose Wednesday, reversing selling pressure earlier in the session as Bloomberg News reported the US is not working to include currency policy pledges in trade accords. Gold steadied on Thursday after falling 2.3% to a one-month low in its previous session. Oil fell for a second day after a government report showed US crude inventories rose the most in two months.

Wall Street’s epic rebound from April’s meltdown is showing signs of exhaustion on speculation stocks have run too fast amid risks stemming from a trade war to an economic slowdown and sticky inflation.

After a 22% jump from last month’s intraday lows, the S&P 500 edged up just 0.1%. Most sectors fell, but big tech climbed. Boeing Co. gained on its largest-ever deal, with Qatar Airways placing an order for long-range jets during a visit to Doha by Donald Trump.

The Nasdaq 100 added 0.6%. The Dow Jones Industrial Average lost 0.2%. A gauge of the “Magnificent Seven” megacaps climbed 1.7%.

The dollar erased losses as Bloomberg News reported the US is not working to include currency policy pledges in trade accords. Bond yields rose as Federal Reserve rate-cut bets receded.NewsLive TVMarketPopular CategoriesCalculatorsTrending NowLet's Connect with CNBCTV 18Network 18 Group :©TV18 Broadcast Limited. All rights reserved.