| Bloomberg Evening Briefing Americas |
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| Traders are unwinding bets that called for the Federal Reserve to slash rates. The combination of a US walk-back on triple-digit tariffs on China, Beijing's simultaneous retreat and a new read on inflation from the US government has Wall Street putting near-term cuts on the shelf. Recent activity in rate options show the unwinds came immediately after the temporary trade war truce between the US and China. On Tuesday, the trend continued following data from the Bureau of Labor Statistics, part of the US Department of Labor, showing consumer prices rose less than forecast. The so-called toxic uncertainty triggered by months of scattershot tariff threats by President Donald Trump, as well as actual levies now in place, were widely expected to take their toll on American wallets. But the data on Tuesday came in soft. In fact, it was the third-straight month US government inflation numbers were lower than forecast. Still, the chief economist at Fitch Ratings has a theory. "Core goods prices have yet to reflect the impact of the tariff hikes that have taken place since February, while services inflation continues to gradually ease," Brian Coulton said in a note. "Core goods inflation is likely to pick up in the next few months as inventories of goods imported pre-tariff hikes get depleted." —David E. Rovella | |
What You Need to Know Today | |
| For now, Wall Street was happy to do some buying. Equities climbed to the highest since February, the month that marked the S&P 500's all-time high. The gauge was up almost 1%, with chipmakers leading the charge as Nvidia and Advanced Micro Devices are set to supply semiconductors to Saudi Arabian firm Humain for a massive data-center project. Here's your markets wrap. | |
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| Vladimir Putin, faced with calls from across Europe to agree to a ceasefire, instead launched a wave of drones in a fresh Russian onslaught on neighboring Ukraine. In conversations between US and European officials, the American side was unclear on whether it was still ready to impose sanctions on Russia if attacks continued, or what it would do—if anything—if the Kremlin leader refused to meet with Ukraine's President Volodymyr Zelenskiy. Also today, the Associated Press reported that the Council of the International Civil Aviation Organization formally found Russia was responsible for shooting down Malaysia Airlines Flight 17 in 2014, killing 298 people.  Flowers placed in memory of the victims of the Malaysia Airlines flight MH17 at the Schiphol airport, near Amsterdam, in 2014. Photographer: Bart Maat/AFP/Getty Images | |
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| Canadian Prime Minister Mark Carney unveiled his new economic team, keeping longtime politician François-Philippe Champagne as finance minister and placing former Goldman Sachs banker Timothy Hodgson in charge of energy and mining. The new government faces a heavy lift in the months ahead: Carney won the April 28 election by telling voters his government can defeat Trump in his own trade war, remove internal trade barriers, boost the value of Canada's energy and mineral resources and create stronger ties with trading partners in Europe and Asia. Carney has said he doesn't expect to simply accept the first deal offered by the US in the current trade standoff. Instead, he wants to negotiate a long-term solution, but that may mean extensive talks to change the North American free trade pact that the US, Canada and Mexico signed during Trump's first term. | |
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| The recent conflict between India and Pakistan is prompting a reassessment of Chinese weapons, challenging long-held perceptions of their inferiority to Western arms and sparking concern in places wary of Beijing. Pakistan hailed the use of its Chinese J-10Cs to shoot down five Indian fighters, including French-made Rafale aircraft, during the short, intense confrontation between the two nuclear powers. Although the reports haven't been confirmed, and India hasn't commented, the jet's maker saw its market capitalization soar by over 55 billion yuan ($7.6 billion), or more than 25%, by the end of last week. Hu Xijin, the ex-editor-in-chief of China's nationalist tabloid Global Times, warned on social media that if Pakistan's successful strikes were true, Taiwan should feel "even more scared." | |
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| One of the largest tech companies would be more valuable if it was smaller, according to a Wall Street analyst. D.A. Davidson's Gil Luria is calling for a "complete breakup" of Alphabet, saying such a move is the best way to unleash shareholder value at the owner of Google. "The only way forward for Alphabet is a complete breakup that would allow investors to own the business they actually want," he wrote, adding that valuing the company on a sum-of-the-parts basis "only works if the company is willing to take action." Luria holds a neutral rating on the stock but said it would be his top megacap pick if Alphabet pursued a breakup. The stock is down 7.5% over the past year, compared with a gain of over 15% for the Nasdaq 100 Index. | |
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What You'll Need to Know Tomorrow | |
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