Stocks rebounded as traders adjusted expectations for Federal Reserve rate cuts, while corporate highlights included Nuveen’s $14 billion acquisition of Schroders and Anthropic nearing a $20 billion funding round at a $350 billion valuation. Other notable news featured Hermès’ strong sales, political tensions over Trump’s tariffs, and major corporate moves from Cisco, AppLovin, Sanofi, SoftBank, and the Waldorf Astoria.
Stocks rebounded in early trading as traders scaled back expectations for imminent Federal Reserve rate cuts following a stronger-than-expected payrolls report. The S&P 500 was flat and the Nasdaq rose 0.3% in the previous session, with futures pointing higher amid easing concerns after recent volatility in real estate and tech stocks. Bond yields remained steady, with the two-year at 3.50% and the ten-year just below 4.16%. The labor market’s resilience, highlighted by healthy wage growth, has led many analysts and Fed officials to argue that there is little room for rate cuts in the near term, with the first cut now expected in July at the earliest.
In corporate news, Cisco shares fell nearly 8% pre-market after reporting solid sales but warning that a memory chip shortage is squeezing margins. AppLovin also dropped about 5% as investors reacted negatively to its results, with the stock down 30% year-to-date. In contrast, Schroders surged almost 30% in London trading after news that Nuveen will acquire the asset manager in a deal valued at nearly $14 billion, creating one of the world’s largest active asset managers with $2.5 trillion in assets under management. The combined group aims to rival industry giants like Capital Group and will retain the Schroders brand.
Anthropic, the AI startup, is reportedly close to raising over $20 billion in a funding round led by Peter Thiel’s Founders Fund and others, valuing the company at around $350 billion—comparable to Netflix and above Goldman Sachs. This reflects a broader trend of investors seeking stakes in multiple leading AI firms, including both Anthropic and OpenAI, as the sector rapidly evolves. Anthropic’s focus on specialized AI models for coding, finance, and legal sectors has drawn significant attention, and the company is rumored to be considering an IPO later this year, though strong private funding may delay that move.
On the political front, President Trump faces rising midterm anxieties as the House passed a bill targeting his tariffs on Canadian imports, with several Republicans joining Democrats in a symbolic rebuke of his trade policies. While the bill is unlikely to become law due to an expected presidential veto, it signals growing dissatisfaction with Trump’s economic agenda, especially as affordability and trade remain key voter concerns. The Supreme Court is also reviewing the president’s use of national security justifications for tariffs, which could have broader implications for trade policy.
Elsewhere, luxury goods maker Hermès reported strong sales driven by continued demand for its Birkin bags, with leather goods now accounting for 45% of sales. The company’s vertically integrated model and pricing power have helped it maintain healthy margins despite global tariff headwinds. L’Oréal is also expected to post solid results, with growth in premium segments and resilience in the U.S. market. Other notable headlines include Sanofi’s CEO ouster after disappointing research results, SoftBank’s profits boosted by its OpenAI stake, and the Waldorf Astoria hotel in New York being put up for sale after renovations.