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S&P 500 and Dow end up higher despite GDP decline and crude prices sink
Investors reacted to news that the U.S. economy has contracted for the first time since 2022 by pulling back U.S. stock prices in late session on Wednesday. Oil prices also posted their largest monthly decline in three-and-a half years. The Dow and S&P 500 both turned positive minutes before the closing bell. The Nasdaq, which is dominated by technology stocks, ended modestly lower. S&P 500, Dow and Nasdaq all lost ground in April. Chuck Carlson of Horizon Investment Services, Hammond, Indiana, said that "the market's actions... are reflective of an economic which is likely to struggle as the year advances." The U.S. Gross Domestic Product contracted in the first three months of 2018, largely because imports surged to avoid tariffs. U.S. president Donald Trump blamed Democratic predecessor Joe Biden and said that his tariffs would bring an eventual booming economy. Carlson said that the reversal could be due to people trying to digest some of these figures and put them in context. Was it really that bad? Are we at the brink of a new recession? Carlson explained that the markets are trying to put this into context and evaluate it. Companies are increasingly lowering or pulling back on their earnings guidance because of tariff uncertainty, as a result of the ongoing multi-fronted trade war. Wall Street pared its losses following the release of positive economic indicators. Consumer spending exceeded expectations and the Personal Consumption Expenditures price index was unchanged from month to month. Meta Platforms, Microsoft and the other "Magnificent 7" companies in the artificial intelligence megacap group are expected to report results after the bell. The Dow Jones Industrial Average climbed 141.74, or 0.35 percent, to reach 40,669.36. The S&P 500 gained 8.23, or 0.15 percent, to reach 5,569.06, and the Nasdaq Composite dropped 14.98, or 0.09 percent, to 17,446.34. Investors pondered key data and corporate results as European stocks finished a volatile session higher. The STOXX 600, however, registered its second consecutive month of losses due to uncertainty over tariffs. The MSCI index of global stocks rose by 1.56 points or 0.19% to 832.90. The pan-European STOXX 600 Index rose by 0.46% while Europe's broad FTSEurofirst 300 Index rose by 9.45 points or 0.45%. Emerging market stocks increased 5.67 points or 0.51% to 1,111.67. MSCI's broadest Asia-Pacific share index outside Japan closed up by 0.88% to 580.65. Japan's Nikkei gained 205.39 or 0.57% to 36,045.38. Dollar gains were maintained after mixed economic data from the United States and trade tensions eased. The dollar index (which measures the greenback versus a basket including the yen, the euro and other currencies) rose by 0.51%, reaching 99.68. However, the euro fell 0.58% to $1.132. The dollar gained 0.52% against the Japanese yen to reach 143.08. The dollar fell 0.63%, to $1.3322. The Mexican peso fell 0.32% against the dollar to 19.616. The Canadian dollar rose 0.33% against the dollar to C$1.38. The benchmark U.S. Treasury rates sawsawed downwards to close at a lower level amid turbulent trading. The yields fell 2 basis points to 4.156% from 4.174% at the close of Tuesday. The 30-year bond rate rose by 2.5 basis points, from 4.648% to 4.6734% late on Tuesday. The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve fell by 5.3 basis points, to 3.605% from 3.658% at late Tuesday. The oil prices continued to fall, recording their biggest monthly drop in almost 3-1/2 years. Trump's trade conflict weakened the demand outlook. U.S. crude oil fell by 3.66%, settling at $58.21 a barrel. Brent, however, settled at $63.12 a barrel, down by 1.76%. The dollar's strength has led to a decline in gold prices. Spot gold dropped 0.65% to $3.294.59 per ounce. U.S. Gold Futures dropped 0.72% to an ounce of $3,295.00.
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Sumitomo and Builders Vision, both Japanese companies, have invested in the US startup Phoenix Tailings.
Sumitomo Corporation of Japan and Builders Vision, a fund that invests in impact investments, have invested in Phoenix Tailings of Phoenix, a U.S. rare earths processing company. This is the latest investment by manufacturers looking to increase production outside of China. Rare earths is a grouping of 17 metals, used in the production of magnets for electric cars, cell phones and electronic devices. After its development in the 1950s, the solvent extraction process, which is the current standard for the refinement of these minerals, has gradually become unpopular in America. However, Chinese companies have perfected it. China's rare earth exports have ceased, causing a rush for substitutes in the West. Phoenix claims its process produces rare earths with minimal or no emissions from recycled ore and mined ore. Sumitomo’s Presidio venture unit, along with Yamaha Motor and Builders Vision and venture capital funds Envisioning Partners and Escape Velocity joined a $33-million tranche for Phoenix’s Series B financing round, which closed April 25, according to the company. Phoenix refused to reveal the funding of each investor. The funding will be used to build a 13 million dollar facility in Exeter, New Hampshire that is capable of producing 200 metric tonnes of rare earths per year. It should open by the end of this year. The company closed its Series B round in December last year with a $43 million first tranche, bringing total funding to $76 millions. A $10 million Series A round of funding closed in August 2021. (Reporting and editing by Margueritachoy)
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Argentina soybean farmers record biggest sales day in 2025
The Rosario grain exchange in Argentina reported on Wednesday that the country had recorded its highest single-day soybean sales volume so far in 2025. This is after the grain transactions slowed down to their lowest pace in more than a decade. The South American agricultural powerhouse, which is a major exporter of soybeans, sold 230,000 tons on Tuesday. This was after heavy rains and the uncertainty surrounding industry policies, exchange rates and harvest delays had caused the trading to slow down. Argentina is the top soybean oil and meal supplier in the world. Analysts attributed the increase to a more stable exchange rate and upcoming financial requirements for farmers in advance of the wheat planting season, which begins next month. Lorena D’Angelo, an independent grains analyst, said: "At the moment, producers must sell due to their upcoming financial maturity." Emilce Terre is a senior analyst with BCR. He said that the sales were also boosted by a relatively calm scenario of exchange rates after Argentina adopted its floating currency scheme earlier this month. The uncertainty surrounding the exchange rate has subsided a little. "The dollar is calm, and no major changes are expected," Terre said. The recent dry weather has improved conditions in soybean harvesting. This was previously below the average pace for the past five years and had also held sales back. The exchange forecasts that the soybean harvest in 2024/25 will reach 45.5 millions tons. It said that sales of soybeans between April 24 to 29 totaled almost 800,000 tonnes, an increase from the 713,000 tones reported by the government during the week April 17 to 23, According to the weather forecast released by the Buenos Aires grain market on Wednesday, Argentina's major agricultural regions will experience mostly dry conditions over the next 7 days.
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Researchers say climate change is responsible for South Korea's deadly blazes.
Scientists said that climate change made the worst wildfires ever seen in South Korea twice as likely. They also warned that such disasters may become more common if temperatures rise. The fires that raged in the southeast of the country lasted for almost a week. They killed 32 people and destroyed around 5,000 structures before being brought under control at the end of March. The fires spread over 104,000 hectares (257,00 acres), which is nearly four times as much land as South Korea's worst fire season of 25 years ago. After combining observations with climate models, a 15-member team from the World Weather Attribution Group found that hot, windy, and dry conditions are now twice as common and 15% more intense. South Korea is prone to fires during this time of year because of its cold, dry winters, and the rapid increase in temperatures in March and April. This was confirmed by June-Yi Lee, Research Center for Climate Sciences, Pusan National university. She told a press briefing that this year's average temperatures between March 22 and 26 were 10 degrees Celsius above normal in the southeast. Patterns of low and high-pressure to the north and the south also generated powerful winds which helped the fire spread. She said that the severity of this year's impact was extreme due to the dry weather and high temperatures. If global warming continues to rise at its current rate, and by 2100 it has risen another 1.3 degrees, the weather conditions that caused fires may become more frequent. Clair Barnes, of Imperial College London's Centre for Environmental Policy (ICL), said that the models predict an average increase of 5% and a doubling in the probability of similar extreme events. Theo Keeping, at ICL's Leverhulme Centre for Wildfires, expressed concern that South Korea had become more fire-prone due to its extensive tree planting program since the 1970s. Forest management must be adjusted to cope with the extreme heat challenges, he said. He said that once a wildfire is severe enough, it cannot be extinguished by drops of water sprayed from helicopters and planes. We must manage the risk before such events occur. Reporting by David Stanway, Editing by Lincoln Feast.
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Kenyan lawmaker shot dead in capital Nairobi, local media says
Citizen TV, a local broadcaster, reported that gunmen riding motorcycles shot and killed a Kenyan legislator on Wednesday evening in Nairobi's capital. Other Kenyan media outlets including The Nation and The Standard newspaper also covered the story. Citizen TV reported that Charles Were was killed at 7:30pm local time by two gunmen "who were following him on a motorbike". Citizen TV reported that one of the gunmen jumped off the motorcycle and shot Were from close range. His driver survived. The MP died at the hospital to which he was taken for treatment. Were was once a member in the ODM, an opposition party led by Raila Odinga. Odinga is a veteran politician who lost the 2022 election to William Ruto. Odinga has reached an agreement with Ruto on issues that concern Kenya. Odinga rejected the results of the election, claiming irregularities. Reporting by Humphrey Malalo, Writing by Elias Biryabarema, Editing by Chris Reese & Bill Berkrot
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Low oil prices raise Russia's deficit forecast for 2025 by three times due to the low price risks
The Russian Finance Ministry increased the estimate of the budget deficit for 2025 to 1.7% of the gross domestic product (GDP), from 0.5%, after reducing energy revenues by 24% in anticipation of a prolonged low oil price period. The ministry reduced the forecast for 2025 oil-and-gas revenues to 8.32 trillion Russian roubles ($101.47billion) or 3.7% GDP, from 10.94 trillion Roubles or 5,1% GDP. The ministry also increased spending by 830 billion Russian roubles. In 2025, the Russian government will have increased its state expenditures on national defense by a quarter to 6,3% of the gross domestic product (GDP), which is the highest since the Cold War. The Finance Minister Anton Siluanov has said that defence spending won't be affected. The budget priorities are unchanged. "The budget priorities remain unchanged." The Kremlin relies heavily on oil and gas revenues, which have accounted for between a third and a half (or more) of the total federal budget revenue over the last decade. Oil prices fell more than 11% last month due to the slowdown in the global economy caused by trade wars. Siluanov said that the announcement was made after a revision to the average oil price used in the budget calculation for 2025. The previous figure of $69.7 per barrel had been revised down to $56. He added that "everything in the budget will be implemented regardless of external factors and conditions." $1 = 81.9955 Russian Roubles (Reporting and writing by Darya Kosunskaya, Gleb Bryanski, Ksenia Orlova; Editing by Sandra Maler).
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In a 'trade-war' scenario, Russia's economic growth in 2025 is projected to be 1.8%
The Russian economy is at risk from international trade wars triggered by protectionist policies in the United States, says the Economy Ministry. It published for the first-time its forecasts of high risks on Wednesday. This scenario projects the price of Brent crude to be $58.1 a barrel. It will then drop to $50 a barrel by 2026. The economic growth in Russia will be 1.8% compared to the 2.5% of the base scenario which is considered too optimistic by most economists. The ministry stated that the scenario "assumes an escalation in trade wars, and a significant slowdown of the global economy which will reduce the global demand for oil and other Russian traditional export commodities." The ministry previously reduced its forecast of the average price for Brent oil in 2025, in the base scenario, by almost 17%. This equates to $68 a barrel. In the first quarter of this year, Russia's oil revenues and gas revenues decreased by 10%. The base scenario projects the average price of Urals blend oil to be $56 per barrel by 2025. In contrast, the Urals blend is expected to cost $48.8 a barrel. The ministry predicted that the inflation rate in 2025 in the high-risk case would be 8.2% compared to 7.6% for the base scenario. It also warned against a delay in reducing the key rate of the central bank. The ministry warned that "the risk is an untimely shift to a softer monetary and credit environment, which would limit the growth in investment activity and expansion of domestic product." In the high-risk scenario, the rouble is expected to fall to an average of 96.6 dollars per rouble in 2025. This compares to 94.3 for the base scenario. The ministry stated that "the volume of exports of goods will decrease more than imports of goods, which will result in a reduction of trade balance, and as a consequence, a stronger depreciation" of the rouble. (Reporting and writing by Darya Kosunskaya; editing by Ed Osmond).
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Oil prices set to fall at the fastest rate since 2021
The oil prices dropped on Wednesday, and are set to have their biggest monthly drop in nearly three and a quarter years. Saudi Arabia has signaled that it will increase production and expand its market share. Meanwhile, the global trade conflict is reducing the outlook for fuel consumption. Brent crude futures fell $1.16 or 1.81% to $63.09 per barrel at 1:00 pm EDT (17:00 GMT). U.S. West Texas Intermediate Crude Futures fell $2.38 or 3.94% to $58.04. Brent and WTI are down by about 15% and 18%, respectively, this month. This is the largest percentage drop since November 2021. Both benchmarks fell after Saudi Arabia, the world's largest oil producer, said it would not continue to cut oil supply and that the market could survive a long period of low oil prices. Phil Flynn is a senior analyst at Price Futures Group. He said: "It makes me worry that we may be heading towards another production battle." Are the Saudis sending a message to their customers that they will regain market share? We'll just have to wait and watch." Saudi Arabia pushed earlier this month for a higher-than-planned OPEC+ production increase in May. Sources told us last week that several OPEC+ countries will propose a ramping up of production increases for a 2nd consecutive month in June. The group will discuss plans for output on May 5. Analysts at PVM said: "The very real chance that OPEC+ continues to bring additional barrels to market in its fight to maintain order within their ranks is added to diplomatic efforts in Ukraine and Iran which, if successful, means more international crude oil on the water during a period when a trade conflict will squash any hopes of demand growth." U.S. president Donald Trump announced tariffs on U.S. imported goods on April 2, and China responded by imposing its own duties, sparking a trade conflict between the two world's largest oil consumers. Oil prices continued to be impacted by concerns about the weakening global economy. Data released on Wednesday revealed that the U.S. economic contraction was exacerbated by the influx of goods imported into the country by companies eager to avoid increased costs. A poll suggests that Trump's tariffs make it likely the global economy will slide into recession in 2019. Data showed that the U.S. consumer's confidence fell to its lowest level in almost five years in April, due to growing tariff concerns. Last week, U.S. crude stockpiles dropped unexpectedly due to higher demand from refineries and exports. This helped limit some price declines. The Energy Information Administration reported on Wednesday that crude inventories dropped by 2.7m barrels, to 440.4m barrels for the week ending April 25. This was in contrast with the analysts' expectation in a survey of a 429,000 barrel increase. (Reporting and editing by Peter Graff; Additional reporting and editing by Ahmad Ghaddar and Siyi Liu, both in Singapore and London; Reporting and Editing by Shadia Nazarala)
Gold prices fall on hopes of rate cuts after weaker US data
Gold prices recovered some of their losses on Wednesday, as the bets that U.S. Federal Reserve would cut rates increased after weaker than expected first quarter U.S. economic growth.
At 10:57 am, spot gold fell 0.2% to $3,308.52 per ounce. ET (1457 GMT). Bullion fell over 1% in the morning session but is on track to record its fourth consecutive month of gains, with a 6% increase so far in April.
U.S. Gold Futures dropped 0.5% to $3318.50.
The data showed that the U.S. Gross Domestic Product contracted by 0.3% on an annualized basis last quarter as businesses imported goods in anticipation of tariffs expected from the Trump Administration.
Gold is still in a bullish market, and the data released today suggests that initial Fed rate reductions will be easier, which should benefit gold, said Tai Wong. An independent metals trader added that given gold's recent sharp rise to $3,500, it may continue to trade sideways.
The Fed will resume cutting rates if it sees clear signs of an economy in decline by June. This could be by as much as a whole percentage point at the end of the calendar year, traders predicted on Wednesday.
Low interest rates are also conducive to the growth of non-yielding gold bullion as a hedge against financial and political turmoil. Last April 22, it reached a record-high of $3,500.05 an ounce.
The U.S. Personal Consumption Expenditures (PCE) Price Index was unchanged in march after increasing by 0.4% in the previous month. The quarterly PCE, excluding volatile components such as food and energy, grew at a rate of 3.5%. This is a significant increase from the 2.6% growth in October-December.
Wong said that gold has largely shrugged off the lowest reading in core PCE in the past pandemic, due to the sharp rally it experienced earlier, following the unexpected contraction of U.S. Gross Domestic Product.
The biggest data on jobs this week is the U.S. monthly employment report, due on Friday. This could provide more insight into the Fed's outlook for interest rates.
China's markets are closed for the Labour Day holiday from May 1-5.
Silver spot fell 0.9%, to $32.68 per ounce. Platinum dropped 1.1% to $866.74. Palladium slipped 0.1% to $933.50. (Reporting by Anjana Anil in Bengaluru; Editing by Sahal Muhammed)
(source: Reuters)