Bonds & Stocks
US stock futures erased most losses after President Donald Trump moved to calm fears of a trade war with China, lifting sentiment after steep declines in bank stocks.S&P 500 contracts were marginally lower after falling as much as 1.5%. After a week when fears about escalating trade tensions between Washington and Beijing fueled sharp swings in stocks, Trump told reporters that current tariffs on China were “not sustainable” and confirmed he would meet with Xi Jinping in South Korea in the coming weeks.Wall Street’s fear gauge, the Cboe Volatility Index, or VIX, retreated from its highest level since April. Havens such as Treasuries and gold erased gains following Trump’s remark and lender results, with 10-year US yields rising two basis points to 3.99%. The dollar clawed back earlier losses to trade little changed.
Economy
The Federal Reserve is ready to cut interest rates again this month due to a weakening job market outweighing inflation fears. There is a sizable Fed contingent calling for caution, pointing to prices that have been running above-target for years and still face upward pressures. Even some policymakers who are open to two more rate cuts this year aren’t confident projecting that trajectory any further ahead. All this means the path for borrowing costs into 2026 is much less clear than the steady downward drift that financial markets are currently betting on.
World
Newcleo Ltd., a struggling UK nuclear startup, has agreed to invest as much as $2 billion to develop uranium fuel facilities in the US with American reactor developer Oklo Inc., a move aimed at expanding the supply chain for the fledgling fission industry. The UK company and Oklo plan to develop multiple projects to promote domestic fuel fabrication and manufacturing infrastructure, Newcleo said in a statement Friday. Newcleo has been paring back its operations in the UK and cutting staff, and the statement didn’t say where it would get the funding for this US effort. Developers of next-generation reactors boast support from the Trump administration, but so far no small reactors have been built in the US.