June 10, 2025

The Pulse: Global Economic and Market News for Tuesday, June 10, 2025

Global markets were mixed on June 10, 2025, as investors weighed the latest World Bank economic outlook, ongoing U.S.-China trade talks, and expectations for upcoming U.S. inflation data. The World Bank’s new report signaled a sharp downgrade in global growth forecasts, citing persistent trade tensions and policy uncertainty as significant headwinds for nearly all economies.

World Bank Slashes Global Growth Forecast

The World Bank cut its 2025 global GDP growth forecast to 2.3%, down from 2.7% projected in January, marking the weakest pace outside of global recessions since 2008. Nearly 70% of all economies had their growth outlooks downgraded, including those of the United States, China, and Europe. The report attributes this slowdown to heightened tariffs—particularly those imposed by the U.S.—and ongoing trade policy uncertainty, which have dampened investment, slowed global trade, and led to record levels of debt. The World Bank also warned that if current trends persist, the first seven years of the 2020s could see the slowest average global growth rate since the 1960s.

Chief Economist Indermit Gill noted, “Outside of Asia, the developing world is becoming a development-free zone,” highlighting that growth in developing economies has ratcheted down for three decades and that global trade growth has fallen from 5% in the 2000s to less than 3% in the 2020s.

U.S.-China Trade Talks in Focus

U.S. equity markets traded in a narrow range as investors monitored the second day of high-level trade negotiations between the United States and China. The talks, aimed at resolving tariff disputes, follow a preliminary agreement reached last month. Still, new concerns have emerged after U.S. officials accused Beijing of obstructing exports vital to industries such as automotive, aerospace, and semiconductors. There is cautious optimism that the U.S. may ease some export restrictions in exchange for accelerated shipments of rare earth minerals from China, which could pave the way for reciprocal tariff relief.

Market Performance and Outlook

The S&P 500 and Nasdaq remained near record highs, buoyed by strong May performance and hopes for a positive outcome from the trade talks. However, market momentum was subdued as investors awaited Wednesday’s U.S. consumer price index report for further signals on the Federal Reserve’s interest rate path. Traders currently expect the Fed to keep rates steady in the near term, with a 63% probability of a rate cut by September.

Healthcare stocks were in focus after the U.S. The Health Secretary replaced all members of a key CDC vaccine advisory panel, causing shares of vaccine manufacturers to dip in premarket trading.

Risks and Inflation

The World Bank cautioned that risks to the global outlook remain “decidedly to the downside.” An escalation in tariffs or further trade fragmentation could shave another 0.5 percentage point off global growth and trigger a collapse in confidence and turmoil in financial markets. Global inflation is expected to reach 2.9% in 2025, remaining above pre-pandemic levels due to higher tariffs and tight labor markets.

Disclosure

This article is for informational purposes only and does not constitute investment advice, an offer to sell, or a solicitation to buy any securities. All information is based on publicly available sources as of June 10, 2025. The author holds no positions in the securities mentioned. Readers should consult financial professionals before making investment decisions.

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The Pulse: Global Economic and Market News for Tuesday, June 10, 2025

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