Wednesday Afternoon Coffee - Markets Update - 11 June 2025 - Markets Slip as CPI Cools, U.S.-China Trade Deal Announced With Few Details

The Trade Academy Team
3 days ago
3 min read

Markets Update: Stocks pulled back Wednesday and the dollar weakened as investors digested cooler-than-expected inflation data and a vague but market-moving statement from President Donald Trump declaring a new U.S.-China trade deal “done.” U.S. Treasury yields retreated as bond demand remained strong despite fiscal concerns.

Global Markets Roundup: 11 June 2025

Wall Street Dips Despite Trade Breakthrough

Equities declined modestly following Trump’s announcement of a trade agreement with China that lacked clarity. The White House said the deal includes a 55% total tariff rate on Chinese goods, structured as a 10% base tariff, 20% for fentanyl trafficking, and 25% in pre-existing duties. China, in turn, would impose a 10% tariff on U.S. imports.

Additional terms included Chinese commitments to supply rare earths and magnets, and renewed U.S. openness to Chinese students in American universities. Despite the apparent breakthrough, market reaction was muted as investors questioned the durability of the pact and noted the lack of detailed provisions.

Meanwhile, inflation data showed minimal upward pressure on prices. The Consumer Price Index (CPI) rose just 0.1% in May after a 0.2% gain in April, as lower gasoline prices helped offset other increases.

Indexes declined across the board:

Dow Jones Industrial Average: little changed
S&P 500: -0.3% to 5,267.41
Nasdaq Composite: -0.5% to 16,376.44

Tesla slipped 0.2% after CEO Elon Musk walked back recent critical remarks about Trump, a gesture interpreted as an attempt to mend strained political ties that had briefly impacted the automaker’s shares.

Global equity sentiment was mixed. The MSCI Asia-Pacific ex-Japan index rose 0.7%, while the STOXX Europe 600 declined 0.3%.

Treasury Yields Ease on Strong Auction

Bond markets rallied as investors responded positively to a well-received $39 billion auction of 10-year notes. The yield on the 10-year Treasury dropped 6 basis points to 4.414%, reflecting firm demand even as budget deficit and policy concerns linger.

Rate futures now suggest a 70% chance of a Fed rate cut by September, up from 57% earlier in the week. Still, policymakers are expected to hold rates steady next week.

Dollar Softens, Euro and Yen Advance

The U.S. dollar index DXY fell 0.35% to 98.62, as softer CPI data and trade deal uncertainty weighed on sentiment.

Euro EURUSD: +0.6% to $1.148
Japanese Yen USDJPY: -0.42% to 144.45

Gold Gains, Oil Surges to 7-Week High

Gold prices advanced as the inflation outlook remained subdued. Spot gold gained 0.5% to $3,339 per ounce.

Oil rallied on renewed hopes for global trade stability:

WTI Crude (CL1!): +4.43% to $67.86/barrel
Brent Crude (BRN1!): +4% to $69.49/barrel

Arabica coffee hovered above $3.55/lb as traders monitored Brazil’s 2025 harvest amid low inventories. The recent peak of $3.167, hit on June 9, remained in sight.

Grains Slip as Traders Await WASDE Report

Soybeans (July): -0.8% to $10.49¾/bushel
Corn (July): -0.5% to $4.36½/bushel
Wheat (July): -0.1% to $5.34¼/bushel

Soybean prices fell despite the trade agreement, with uncertainty ahead of Thursday’s USDA WASDE report keeping buyers on the sidelines.

Outlook

Markets appear to be cautiously optimistic, but uncertainty over the durability and enforcement of the new U.S.-China deal, along with ongoing inflation and rate policy questions, is likely to keep volatility elevated.

Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team