Market Talks covering the impact of U.S. Politics and White House policies on companies and markets. Published exclusively on Dow Jones Newswires throughout the day.

0603 ET - Recent euro strength, cheaper oil, and the potential hit to economic activity from trade confusion will keep the European Central Bank on an easing path, says Mediolanum International Funds' Daniel Loughney. At Thursday's meeting, the ECB is expected to cut interest rates, bringing the deposit rate to 2.0% from 2.25% as eurozone inflation continues to weaken. Inflation in the region's top four economies is likely to be at or below the ECB's target for the first time in eight months, the head of fixed income says in a note. The ECB is expected to communicate a cautious wait-and-see approach on Thursday, until there is more clarity on the trade front, he says. (emese.bartha@wsj.com)

0513 ET - The cost of insuring euro-denominated credit against default using credit default swaps rises as trade tensions dampen appetite for risk assets. Investors turn defensive after U.S. President Trump threatened 50% tariffs on steel and aluminum imports, IG analysts say in a note. The iTraxx Europe Crossover index which tracks euro junk bond credit default swaps climbs 3 basis points to 303bps, S&P Global Market Intelligence data show. The iTraxx Europe Main index which tracks euro investment-grade credit default swaps rises 1bp to 59bps. (miriam.mukuru@wsj.com)

0506 ET - The recent clash might further damp optimism surrounding U.S. and China trade talks, Nomura analysts say in a research note. "The strategic decoupling between the two countries is inevitably intensifying," the analysts say, pointing out that both countries have imposed a spate of non-tariff measures against each other. The tech decoupling will likely force China to advance tech self-reliance, but in the near term, China's access to advanced tech will likely be increasingly banned, Nomura says. (tracy.qu@wsj.com)

0434 ET - A potential increase to 50% import duties from 25% by the U.S. on steel would be a headwind for EU-listed steel companies which export to the country, Jefferies analysts Cole Hathorn and Tommaso Castello say in a research note. For example, Luxembourg-based ArcelorMittal faces an estimated $100 million a quarter hit under a 25% tariff scenario, the analysts say. That quarterly impact would rise, totaling an estimated more than $500 million a year, if tariffs increase to 50%, they add. A rise to 50% tariffs would also affect Austria's Voestalpine, Jefferies says, increasing the hit to the company to more than 80 million euros from an initial 30 million to 40 million euro impact under 25% tariffs. (pierre.bertrand@wsj.com)

0358 ET - Gold futures rise on heightened geopolitical and macroeconomic risk that increases the precious metal's safe-haven appeal. Futures are up 1.9% at $3,378.0 a troy ounce. Gold is gaining as China pushes back on U.S. President Trump's accusation last week that it broke a temporary trade agreement, souring market hopes for a lasting resolution to the trade tensions. Trump has further threatened to double the current 25% tariffs on all steel and aluminum imports from Wednesday, further stoking market volatility. Meanwhile, geopolitical tensions were also ratcheted up over the weekend, as Ukraine launched drone attacks deep inside Russian territory. (joseph.hoppe@wsj.com)

0350 ET - Shares in European steel companies like ArcelorMittal and Thyssenkrupp fell in early European trading as President Trump threatened to double import taxes on steel and aluminum. On Friday, said that tariffs on imported steel and aluminum would increase to 50% from 25% from June 4. Thyssenkrupp shares traded 2.6% lower, while shares of ArcelorMittal trade 2.2% lower. Meanwhile, shares of SSAB and Acerinox, both of which have operations in the U.S., traded 3.6% and 5.5% higher respectively. (pierre.bertrand@wsj.com)

0347 ET - Emerging-market equities offer diversification away from the U.S. economy, Olivier d'Incan, global equity fund manager at Credit Mutuel Asset Management says in a note. "Emerging markets (EM) typically grow faster than developed economies, driven by a rising middle class and expanding economic infrastructure," he says. While some emerging market stocks are likely to experience volatility due to ongoing trade tensions, some high-quality stocks appear attractive in the long term, d'Incan says. (miriam.mukuru@wsj.com)

0329 ET - European car stocks fall in early trade after President Trump said he was doubling the tariff on imported steel and aluminum and new data showed French car registrations dropped sharply in May. Jeep maker Stellantis is the biggest decliner among European carmakers, down 3.9%. Mercedes-Benz and Renault shed more than 3%, while Volkswagen, BMW, Porsche and Volvo Car all fall more than 1%. The declines track losses among car stocks in Asia, where Toyota, Honda, Nissan, Kia and Hyundai all closed lower. Trump said tariffs on imported steel, as well as aluminum, would increase to 50% from the current 25%, effective Wednesday. Meanwhile, French auto industry group PFA said new-car registrations--which reflect sales--in May fell 12% compared with a year earlier to 123,919.(adria.calatayud@wsj.com)

0321 ET - Orsted is likely to book another 1.2 billion Danish kroner ($182.6 million) impairment charge in 2Q after President Trump announced the doubling of tariffs on steel and aluminum imports to 50% from 25%, Citi analysts say in a note. The company took a similar hit as part of its 1Q earnings linked to the U.S. government's 25% tariff on imports of steel and aluminium--and certain products containing them--citing increased costs and contingencies stemming from its wind projects. "We continue to wait for clarity around the outcome of US-EU tariff negotiation, which Orsted said a 20% tariff could add around 600 million Danish kroner, which has yet to be recognized in its accounts," Citi says. In April President Trump threatened a 20% reciprocal tariff on EU imports unless a deal was reached after a 90-day negotiation period. (anthony.orunagoriainoff@dowjones.com)

0301 ET - The dollar falls as trade concerns heat up after U.S. President Trump on Friday announced plans to double tariffs on steel and aluminum up to 50%, starting Wednesday. Trade tensions between the U.S. and China also returned after Trump accused China of breaking a recent trade truce. "In the long term, it will become increasingly clear that the U.S. administration has no intention of abandoning tariffs," Commerzbank analyst Michael Pfister says in a note. The DXY dollar index falls 0.4% to a 6-day low of 98.926. The euro rises 0.5% to $1.1403. (jessica.fleetham@wsj.com)

0239 ET - U.S. Treasury yields are little changed in early European hours as concerns grow over U.S. debt after Treasury Secretary Scott Bessent rejected the prospect of the U.S. ever defaulting. "The fact that the question is even being asked seems place a few asterisks around that answer," Rabobank analysts say in a note. The 10-year Treasury yield is up about 1 basis point at 4.425%, while the two-year yield is flat at 3.911%, according to LSEG data. (emese.bartha@wsj.com)

0133 ET - A high fiscal deficit and interest costs could put the U.S. economy in a bind and risk financial stability, DBS economists say. As the global debt burden heads to 100% of GDP by end-2025, the U.S. is adding debt at the fastest pace. Despite the Trump administration's "sound and fury" over government program cuts, federal spending was up 7% through the first five months of the year, says chief economist Taimur Baig. Big tax cuts are also being legislated. Trump's "One Big Beautiful" bill is bound to add trillions to U.S. debt and interest costs in the coming years, Baig says. As the deadline for raising the federal debt ceiling looms, Treasury Secretary Bessent has said the U.S. "is never going to default." "We are on the warning track and we will never hit the wall," he told CBS. (fabiana.negrinochoa@wsj.com)

(END) Dow Jones Newswires

June 02, 2025 06:03 ET (10:03 GMT)

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