The Pulse: Global Economic and Market News for Thursday, June 12, 2025

Overview

On June 12, 2025, global financial markets navigated a mix of softer U.S. inflation data, volatile trade negotiations, and heightened geopolitical tensions. While some sectors and regions found reasons for optimism, overall sentiment remained cautious as investors weighed the implications of ongoing policy uncertainty and shifting capital flows.

Key Developments

•               U.S. Inflation and Federal Reserve Outlook

The U.S. Consumer Price Index (CPI) for May rose just 0.1%, below consensus estimates, easing some concerns about persistent inflation. Core CPI (excluding food and energy) also increased by only 0.1%. These softer readings have fueled speculation that the Federal Reserve may resume interest rate cuts later this year, with futures markets now pricing in a strong possibility of two reductions by year-end. The Producer Price Index also missed expectations, reducing stagflation fears and contributing to a modest rally in U.S. equities, particularly in the tech sector. This potential shift in the Fed's policy could have significant implications for the market, as it could influence borrowing costs and investment decisions.

•               Market Performance and Sector Highlights

U.S. stocks closed mixed after a choppy session. The S&P 500 rebounded, buoyed by a surge in Oracle shares following strong earnings and robust growth in cloud infrastructure. The Energy sector outperformed, while Materials and Consumer Discretionary lagged. The CBOE Volatility Index (VIX) ticked higher, reflecting lingering market uncertainty.

In North America, major indices posted gains, except for the Russell 2000, which ended the day down. Gold surged above $3,400 per ounce as investors sought safe havens amid geopolitical tensions, and the U.S. dollar extended its decline, hitting a new 2025 low.

•               Global Markets and Trade Tensions

Asia-Pacific markets delivered mixed results. Japan’s Nikkei 225 and Hong Kong’s Hang Seng both declined as investors reacted to the lack of detail in the new U.S.-China trade framework and ongoing regulatory concerns. South Korea’s Kospi outperformed, driven by strength in semiconductor and technology shares. European indices also retreated on renewed worries about trade and policy.

The U.S. and China reached a tentative framework to reduce tariffs, but the deal’s lack of specifics and the possibility of further U.S. trade actions kept markets on edge. President Trump indicated that new trade terms would soon be sent to other nations, adding to global uncertainty. The ongoing trade tensions between the U.S. and China have been a major source of market volatility, with investors closely monitoring any developments that could affect global trade and economic growth.

•               Commodities and Currencies

Oil prices hovered near two-month highs, supported by concerns over potential supply disruptions in the Middle East. The euro and Swiss franc strengthened against the U.S. dollar as investors rotated into safe-haven currencies. The euro’s rise, however, has begun to concern European policymakers, given its potential to dampen export competitiveness.

•               World Bank Global Growth Forecast

The World Bank cut its global growth forecast for 2025 to 2.3%, citing higher tariffs and persistent uncertainty as significant headwinds. This downward revision in the growth forecast is a clear indication of the challenges the global economy is facing. International trade is expected to grow just 1.8% this year, well below historical averages. The risk of a global recession remains low, but the outlook is decidedly tilted to the downside, particularly if trade tensions escalate further.

Disclosure

This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Market conditions can change rapidly, and readers should consult with financial professionals before making any investment decisions. The information presented is based on publicly available sources as of June 12, 2025.

Sources

• Reuters: Global stocks and the dollar slipped as investors sized up U.S. inflation and trade truce news
• MarketPulse: North American markets recap and currency moves
• STL.News: Global markets react to trade talks, inflation data, and geopolitical tensions
• Nasdaq: U.S. stock market news and sector performance
• World Bank: Global growth forecast and economic outlook
• Duncan Williams Asset Management: Midday market roundup

‍