The more things change, the more they stay the same, the French proverb goes. That certainly seems to apply to the stock market these days.

Compared to the start of the year, a lot looks very similar. Monday, the S&P 500 is just above 6000, 2% higher than on Jan. 1. After a decent jobs report Friday and inflation data coming this week, the Federal Reserve is expected to deliver one, or maybe two, interest-rate cuts by Christmas, much as it looked back then. And with an eye to today's Apple's Worldwide Developers Conference, investors are hoping that technology stocks will help lift the market.

Of course, that veneer of business-as-usual covers up a lot of turbulence. Stocks may be about where they were six months ago, but it's been a wild ride -- the S&P 500 is up more than 20% from its April low. The Magnificent Seven stocks drove the market higher in 2024 through their collective strength, but the group has somewhat disbanded this year -- some, such as Microsoft, Amazon, and Facebook-parent Meta Platforms have done very well. Chip maker Nvidia has done alright. Google-parent Alphabet, Elon Musk's Tesla, and Apple have performed poorly.

Overshadowing everything is the prospect of what President Donald Trump's tariffs will do to the economy in the next few months. U.S. and Chinese officials are meeting today in London to continue talks. There may be a low bar for success -- investors probably don't expect a full deal to emerge, but they may be encouraged if the talks end on a friendly note. Consumer price data and producer prices published on Wednesday and Thursday will reveal what tariffs have already done to costs.

Just like the beginning of the year, investors are wondering whether the S&P 500 is on the road to new record highs -- it needs to rise another 2.3%. Successful trade talks between the world's two largest economies would be a good start.

-- Brian Swint

*** Join Barron's senior managing editor Lauren R. Rublin, deputy editor Ben Levisohn, and Michael Reid, senior U.S. economist at RBC Capital Markets, today at noon when they discuss the outlook for financial markets, industry sectors, and individual stocks. Sign up here.

***

Inflation Data This Week Could Signal More Volatility

This week features two inflation readings that could signal fresh market volatility as investors try to gauge how Trump administration trade policies are affecting businesses and consumers. The reports come as a U.S. trade delegation is set to meet with counterparts from China today in London.

   -- The consumer price index for May, due out Wednesday, is expected to show 
      prices ticked 2.5% higher last month from a year ago compared with 
      April's 2.3% gain. Core prices excluding food and fuel are expected to 
      rise 2.9% from last year, according to FactSet. 
 
   -- Producer prices are also poised to rise, according to estimates which see 
      a 2.6% rise for May from a year earlier versus the 2.4% recorded in 
      April. Core PPI is expected to cool slightly, to 3% from a year ago 
      versus the 3.1% gain in April, according to FactSet. 
 
   -- Rising inflation could weigh on the Federal Reserve's interest-rate 
      decision this month. The futures market is putting a 97% probability on 
      rates staying the same after the June 17-18 meeting. Still, the S&P 500 
      has regained ground lost since tariff worries began, now up 2% for the 
      year. 
 
   -- But some are questioning the reliability of some economic data since the 
      government started freezing hiring and making staff cuts. The Bureau of 
      Labor Statistics has reduced regional collection efforts. Though it won't 
      affect headline CPI numbers, that could affect certain details 
      underpinning the numbers. 

What's Next: Friday's Michigan consumer sentiment reading could also be a sign of how investors are feeling about the markets. The April reading of 53.3 was the lowest since summer 2022. Economists expect the May reading to tick slightly higher to 52.5.

-- Liz Moyer

***

Tesla Faces Crunch Week With Robotaxis, Trump in Focus

It's going to be another big week for Tesla stock as investors await the hotly anticipated launch of the electric-vehicle maker's robotaxi service, while tracking the fallout from the explosive row between CEO Elon Musk and President Donald Trump.

   -- The shares plunged close to 15% last week after Musk escalated his 
      criticism of Trump's tax and spending bill, which quickly descended into 
      a war of words on social media. Before the feud, Tesla stock had gained 
      more than $100 a share or about 45% since its April 22 earnings. 
 
   -- The focus may shift again, though, with reports suggesting the EV maker 
      could launch its robotaxi service in Austin, Texas as early as Thursday 
      this week, though Tesla hasn't confirmed precise details. 
 
   -- Investors are also digesting a key departure when it comes to the 
      company's robotics aspirations. Milan Kovac, Tesla's head of engineering 
      for the humanoid robot Optimus, announced Friday he was leaving the 
      company after almost a decade. He thanked Musk and added, "Tesla will win, 
      I guarantee you that." 

What's Next: Investors are optimistic that AI-related products will unlock more profitable growth for Tesla. But with a lot of moving parts this week, more volatility is a good bet.

-- Al Root and Callum Keown

***

Get Ready for the Berkshire Hathaway Wannabes

As Berkshire Hathaway's longtime CEO Warren Buffett prepares to step down at the end of the year, the spotlight is turning to a group of companies that use -- or plan to use -- his strategy of combining insurance and investments. Indeed the Buffett investment approach has never been more popular.

   -- It's being used by top asset managers including Apollo Global Management, 
      where insurance is now central to the firm's growth, and KKR, which 
      invokes Berkshire as it invests alongside its investor base. Billionaire 
      investor Bill Ackman recently got approval to turn real estate firm 
      Howard Hughes Holdings into a "mini-Berkshire." 
 
   -- Billionaire hedge fund manager Dan Loeb wants to transform his 
      European-listed investment fund, Third Point Investors, into an insurer 
      focused on the hot annuity market. Similar strategies are in play at 
      Markel Group and Fairfax Financial Holdings, whose chairman and founder 
      Prem Watsa, 74, has been called a Canadian Buffett. 
 
   -- Markel and Fairfax are probably the closest to Berkshire in structure, 
      and each has generated impressive, if not quite Berkshire-like, returns 
      since the mid-1980s, while attracting a dedicated group of investors. 
      Markel is led by CEO Tom Gayner, who has many fans among the Berkshire 
      faithful. 
 
   -- Greenlight Capital Re, a small offshore reinsurer, farms out its 
      investments to founder and value hedge fund manager David Einhorn, 
      another Buffett fan. He has struggled with disappointing insurance 
      underwriting and investment results. The stock is below its 2007 
      initial-public-offering price. 

What's Next: Money already may be starting to move toward the mini-Berkshires. Fairfax is up 6% since the Berkshire annual meeting, when Buffett revealed his plans. Loews and White Mountains Insurance are two other companies that could benefit. For more on this read here.

-- Andrew Bary

***

Latest IPOs Show Unicorns Are Back. Chime, Voyager Next.

The unicorns are back. Last week's blockbuster initial public offering by stablecoin issuer Circle Internet, coupled with the recent surge in the shares of artificial intelligence company CoreWeave, suggests that investor appetite for stocks of riskier emerging-growth companies is once again alive and well.

   -- Circle's shares jumped 170% on debut day Thursday, and another 30% on 
      Friday. That followed a relatively lackluster first day of trading for 
      CoreWeave in March at a time of peak worry about tariffs. But the shares 
      are around $140 now from their IPO at $40. 
 
   -- Fintech Chime and space and defense company Voyager Technologies are set 
      to debut this week. Chime is currently set to sell 32 million shares at a 
      price range of $24 to $26 each, which would raise $800 million at the 
      midpoint, and value the company at more than $10 billion. 
 
   -- Voyager is planning to sell 11 million shares at a range of $26 to $29 
      each. At the middle of that range, Voyager would raise more than $300 
      million from the stock sale, and have a market value of $1.6 billion. 
 
   -- Samuel Kerr, head of equity capital markets at Mergermarket, told 
      Barron's that the aftermarket performance for CoreWeave and Circle stock 
      might finally convince some other privately held companies that have been 
      sitting on the sidelines to file for IPOs as well. 

What's Next: BeiChen Lin, senior investment strategist with Russell Investments, said that IPO and deal activity should pick up later this year if the Federal Reserve starts cutting interest rates again and if the Trump administration turns its focus to deregulatory efforts.

-- Paul R. La Monica

***

U.S. Drug Industry Looking to China for New Cancer Treatments

The drug industry has followed the Trump administration's efforts to move manufacturing and investment into the U.S. A long list of big firms have committed tens of billions of dollars to factories and research facilities in the U.S. But U.S. drugmakers have also supercharged their interest in China-based biotechs.

   -- In the past few months, U.S. companies have announced what are likely to 
      be the biggest deals ever for the rights to experimental medicines 
      invented by Chinese companies. So far, the Trump administration has been 
      silent on the deals, which represent $25 billion in upfront and potential 
      milestone payments. 
 
   -- The deals could one day result in new options for sick patients, but they 
      also pose a major risk to U.S. biotech firms. The domestic drug pipeline 
      relies on capital from Big Pharma, and now those funds may be going to 
      start-ups in Shanghai, rather than Cambridge, Mass. 
 
   -- The biggest deals have come in just the past two weeks. In mid May, 
      Pfizer said it would pay the Chinese biotech 3SBio $1.3 billion up front 
      for its own immunotherapy cancer drug, plus billions more in potential 
      milestone payments. Pfizer is also making a $100 million equity 
      investment in 3SBio. 
 
   -- This past week, Bristol Myers Squibb said it would pay $3.5 billion over 
      the next three years, plus billions more dollars in potential milestone 
      payments, for half the rights to a similar drug developed by a Chinese 
      company called Biotheus, which German biotech BioNTech acquired a few 
      months ago. 

What's Next: The White House didn't respond to a request for comment. With the latest cancer drug deals, Chinese companies are innovating a new class of drugs that every Big Pharma firm seems to think it needs to get in on. For more on this, read here.

-- Josh Nathan-Kazis

***

MarketWatch Wants to Hear From You

If the Republican tax and spending bill becomes law, it could usher in an era of increased privatization of student lending. What does that mean for potential borrowers?

A MarketWatch correspondent will answer this question soon. Meanwhile, send any questions you would like answered to thebarronsdaily@barrons.com.

***

-- Newsletter edited by Liz Moyer, Rupert Steiner

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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June 09, 2025 06:55 ET (10:55 GMT)

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