Schwab Market Update

Published as of: June 12, 2025, 9:05 a.m. ET

(Thursday market open) After a lackluster reaction yesterday to the new trade framework with China, Wall Street ran into more pressure early today amid a crosscurrent of negative factors. Tensions in the Middle East, a plane crash in India, and tariff worries pushed major indexes and the dollar lower as investors examined fresh U.S. jobs and inflation data.

The May Producer Price Index (PPI) and core PPI, which excludes food and energy, both rose 0.1%. Analysts had expected a 0.2% rise for headline and a 0.3% rise for core PPI, which measures prices at the wholesale level. The April figures were both revised up to –0.2%. "The PPI report came in much softer than expected," said Collin Martin, director, fixed income strategy, at the Schwab Center for Financial Research. "The services component reversed April's decline but the monthly gain still suggests the disinflationary trend continues and consumer demand is waning."

The PPI followed a benign Consumer Price Index (CPI) yesterday, but markets had a rough Wednesday as it appears the China deal could keep tariffs on Chinese imports at the current 55% and might not open the way for more U.S. high-tech exports. President Trump then suggested he could unilaterally decide on individual country tariffs before the early July deadline, raising concerns of elevated levels, though he did say that could be extended. Separately, Trump said the U.S. is moving some government staff out of the Middle East, raising worries about possible skirmishes with Iran, and Boeing (BA) shares fell after an Air India plane crashed with more than 200 aboard.

1. Jobless claims stay elevated: Initial weekly jobless claims data today came in at 248,000, near the Briefing.com consensus of 250,000 but elevated for the third straight week from the near-term range. Continuing claims also stood out, climbing to 1.956 million, the highest in more than three years and up more than 50,000 from the prior week, suggesting jobs might be harder to find for people who lose their old ones. The May New York Fed consumer survey found a slight rebound in confidence regarding finding a job, but it was still weak historically. Labor trends often show up in survey data. "The labor market is icing over," said Kevin Gordon, director, senior investment strategist at Schwab. "Companies have cut back on hiring plans, but they aren’t yet teeing up firings to any significant degree. We think that has caused the labor market to freeze, evidenced by the significant drop in the quits rate, the steady increase in continuing jobless claims, and still-elevated share of multiple jobholders."
    
2. Government cutbacks in data collection raise concerns: The May CPI report was the fourth straight—beginning with February's—to come in lower than Bloomberg's median survey estimates. The market initially welcomed the lighter readings, but there's some concern about research behind the numbers in the wake of federal government job cuts. In a recent article, MarketWatch referred to "creeping doubts about the quality of official data," noting that the Bureau of Labor Statistics said it had to cut back on some regional collection efforts that went into the CPI in April and in June. "BLS is reducing sample sizes in areas across the country," the agency said in a press release last week. "These actions have minimal impact on the overall-all-items CPI-U index, but they may increase the volatility of subnational or item-specific indexes." The agency said it makes reductions "when current resources can no longer support the collection effort."
    
3. Crude rises but remains below 2022–24 high: Crude oil (/CL) topped $67 per barrel yesterday, the highest since April, as chances of a U.S. nuclear deal with Iran appeared to fade and worries grew about a possible strike against the country. This raises concerns about the impact of gas prices on consumers and margins for major transport companies like airlines and trucking firms. Even with the recent rise, crude remains well below the $70 to $80 range it traded in most of the last two years since calming from near-record highs when Russia attacked Ukraine in 2022. And this comeback might be short-lived if analysts are right. The International Energy Agency recently predicted demand growth of below one million barrels a day this year, even as OPEC and its allies keep raising production. The recent bump in prices likely reflects hopes of a trade thaw between the U.S. and China. S&P Global said this week that U.S. crude oil prices could fall below $50 this year, and even as low as $40, though that's not necessarily positive as it could reflect a weaker economy. It also would likely mean very rough sailing for the U.S. energy industry, considering the break-even price for drillers is thought to be around $60 per barrel. One level to watch is the 200-day moving average of $68.74 per barrel, Briefing.com noted.

• Boeing fell more than 7% in pre-market trading. The plane that crashed in India today was an 11-year old Boeing 787. Boeing said there are no survivors, NBC News reported.
   
• Tesla (TSLA) fell 2.3% in early trading but is up sharply the last few days amid hopes for the Robotaxi launch later this month.
   
• Oracle (ORCL) climbed nearly 9% in pre-market trading after reporting earnings that exceeded analysts' expectations and firm guidance for fiscal 2026. Revenue in the closely watched cloud infrastructure segment rose 52% year over year, an even better performance than the prior quarter, and the company expects that to grow even more in fiscal 2026.
   
• Chevron (CVX), Exxon Mobil (XOM), and ConocoPhillips (COP) were down in pre-market trading after all three energy firms enjoyed 1% to 2% gains yesterday amid rising oil prices.
   
• Quantum Computing (QUBT) climbed another 1% early Thursday after rising about 25% yesterday on positive comments about the quantum computing business made by Nvidia CEO Jensen Huang. Rigetti Computing (RGTI) rose 12% yesterday.
   
• Semiconductor shares including Nvidia (NVDA) and Broadcom (AVGO) fell more than 1% ahead of the open after the sector lost ground yesterday on concerns that a possible deal with China won't allow China to import more U.S chips.
   
• Amazon (AMZN) was down 0.5% early Thursday after falling 2% yesterday along with many other retail stocks when an appeals court decided President Trump's tariffs on overseas products could remain in place as the court case continues. An earlier ruling found the tariffs unconstitutional. The case could ultimately be decided by the Supreme Court. Many retailers, including those whose shares fell yesterday like Nike (NKE), Walmart (WMT), and Target (TGT) source many materials and products from abroad. Those three stocks fell again Thursday as well.
   
• General Aerospace (GE) fell 4% ahead of the open. The company's GEnx engines powered the Air India flight that crashed today, Barron's reported.
   
• Voyager Technologies (VOYG) climbed more than 4% in pre-market trading after climbing 82% on its trading debut yesterday.
   
• Bitcoin (/BTC) slipped 1.8% in the early going, and shares of crypto-related names like Coinbase Global (COIN) and Strategy (MSTR) each fell 2%.
   
• GameStop (GME) dropped 16% in early trading as the company announced it will sell $1.75 billion in convertible notes, Barron's reported. The move is to raise money to potentially buy more bitcoin, CNBC reported. Convertible notes are a form of debt that converts to equity.
   
• The 10-year Treasury note yield (TNX:CGI) fell after strong demand for an auction yesterday. The Treasury auctions off 30-year bonds today, and demand trends will likely be under scrutiny.

Washington watch: The latest update from Washington checked in on the budget process as the Senate works to advance a bill passed last month by the House. Michael Townsend, managing director, legal and government affairs, talked through what the bill might mean for markets and the economy in his new analysis.

Yen-carry anniversary approaches: Almost a year ago, U.S. markets were up-ended by what became known as the collapse of the yen carry trade. Learn what that was and why there's less concern about a repeat in the latest analysis from Schwab.

Though last week's May nonfarm payrolls report looked solid in some ways, weekly initial jobless claims have been climbing for some time, according to data seen here over the last year from the St. Louis Fed. Before today's initial claims report, the four-week moving average (blue line) was approaching 235,000, the highest since last October and up from below 210,000 at the start of the year. 

Check out the Investors' Calendar for a summary of the top economic events and earnings reports on tap this week.

June 9: Expected earnings from Casey's General (CASY).
June 10: Expected earnings from GameStop (GME) and Stitch Fix (SFIX).
June 11: May Consumer Price Index (CPI) and expected earnings from Chewy (CHWY).
June 12: May Producer Price Index (PPI) and expected earnings from Adobe (ADBE).
June 13: Preliminary June University of Michigan Consumer Sentiment.