The Rare Earth Rerun
Market Report for Tuesday, June 10, 2025
The Rare Earth Rerun
Stocks rose Tuesday as traders squinted at London’s trade talks, decided the tariff drama was heading for a whole lot of nothing, and snapped up the opening-salvo losers. Shorts got squeezed while rare earths stayed rarer than geology intended.
Level Change 6/10/25 (%)
– – – – – – – – – – – – – – –
+0.3 Dow
+0.6 Nasdaq
+0.7 Nasdaq 100
+0.6 S&P 500
+0.3 S&P 400
+0.7 S&P 600
The rally kept inching forward, slow but steady, like a dog sniffing its way back to a buried bone. Tails are wagging, with the major indexes now close enough to record highs to lift a leg. The S&P sits just 1.7% from February’s peak, and the Nasdaq is 2.3% off its December high.
Beneath the calm surface, it was a feeding frenzy for misfits. Heavily shorted names, so-called low-quality fare, and year-to-date losers staged a comeback.
Shares of Tesla (TSLA +5.7%) rose nearly 6% despite last week’s pile-on of bearish bets during the Trump-Musk feud, which seems to have been more about setting up a trade than settling a score. Just sayin’.
Energy looks less recession-burdened these days. After plunging on “Liberation Day” tariff fears, the sector is up 11% from the bottom, with 4% of that since Thursday. As the outlines of doom blur, the market is slipping back into its favorite outfit: mindless optimism.
Investors kept eyes on London, where US-China trade talks resumed with the usual choreography: hopeful remarks, no details, and a promise to stay another day if the magic doesn’t happen tonight. Commerce Secretary Lutnick said things are going well, which in diplomatic terms means “not derailed yet.” Analysts expect a mutual loosening of export controls. The US might throw a few tech scraps back over the fence in exchange for China easing rare-earth restrictions.
From our “more than just two countries in the world” file, the US and India are reportedly closing in on an interim trade deal. It’s unclear whether this will involve actual trade, or just more interims.
Like investors, companies are starting to see through the trade war pantomime. The NFIB Small Business Optimism Index ticked up to 98.8 in May from 95.8 in April, snapping a four-month losing streak and beating expectations. Not everyone’s buying the recession postcards.
Markets are holding their breath for tomorrow’s CPI report, with whispers of a slightly cooler print. Analysts expect headline inflation to have risen 0.2% in May, pushing the year-over-year rate to 2.5%. Core CPI is seen ticking up 0.3%, nudging the annual rate to 2.9%.
The key question: have companies started cranking prices higher because they think costs will rise, or because they can’t get enough stuff to sell? Either way, it’s bad for demand and worse for Fed doves hoping to cut rates without looking reckless.
And you know whose social media impulses will flare up at that news. Brace yourself, “Too Late” Powell.
Finally, a check-in at the civilizational inflection point.
In a move that feels equal parts strategic and awkward, OpenAI has tapped Google (GOOG +1.3%) Cloud to help power its ever-growing appetite for compute. Reuters called it a surprise. It is—and isn’t. The two are fierce rivals in AI, but training those models takes a whole lot of horsepower, and apparently not even OpenAI can build it all alone. Google does sell cloud services, so…
Google’s cloud unit gets the win, supplying extra capacity to help OpenAI scale ChatGPT, the very product giving Google’s core search business night sweats. The threat to Google Search hasn’t gone anywhere. But at least now, it gets to bill the competition by the petaflop-second.
Over at Meta (META +1.2%), Mark Zuckerberg is reportedly unhappy with how Llama 4 is performing, and how the world is reacting to it.
So he’s doing what any frustrated billionaire would do: holding home-based AGI strategy meetings in Lake Tahoe and Palo Alto, handpicking a team of experts to build the superintelligence. Your correspondent needs to rethink his parties.
According to Bloomberg, Zuck’s hiring 50 people and reshuffling the Menlo Park layout to keep his new AI brain trust within walking distance of his office. The goal: catch up to OpenAI, which still leads the race Meta insists it’s not losing. The New York Times says the effort includes Alexandr Wang of Scale AI, with Meta considering a multi-billion dollar investment in his company.
And that was the day.
Stocks are drifting higher, trade talks are drifting sideways, and megatech is drifting into each other’s server farms. It might be the calm before something, but nobody’s quite sure what.
— Jason Kelly