Stocks tick up but dollar hits 2025 low amid mixed macro signals

The dollar hit a 2025 low on Thursday but Wall Street stocks held near record highs as traders weighed low inflation readings, rising Middle East tensions, and the fragility of a U.S.-China trade truce.

U.S. consumer and producer inflation reports showed overall price pressures remained contained in May, largely due to declines in the cost of gasoline, cars and housing, or services like air transport. But most economists expect inflation to pick up as the impact of U.S. tariffs begins to bite.

The dollar, which has lost around 10% in value against a basket of currencies this year, fell to its lowest since April 2022.

Global stocks continued an almost-unbroken rally since early April, leaving the MSCI All-Country World index up 0.25%, just below Wednesday’s all-time high.

On Wall Street, the Dow Jones Industrial Average added 0.16%, while the S&P 500 and the Nasdaq Composite both gained about 0.3%.

Shares of planemaker Boeing lost about 5% after an Air India aircraft carrying more than 200 people crashed in India’s western city of Ahmedabad, and aviation tracking site Flightradar24 said the plane was a Boeing 787-8 Dreamliner.

Oracle shares rose nearly 14% after the cloud service provider raised its annual revenue growth forecast.

European equities logged their fourth consecutive decline on Thursday as trade optimism waned, with the STOXX 600 down 0.3%. Stocks in China and Hong Kong also fell, led by declines in the tech sector.

The U.S. administration said on Wednesday U.S. personnel were being moved out of the Middle East due to heightened regional security risks, which briefly drove oil prices up by 4% before they receded.

“(A flare-up in tensions) is a significant tail risk, but I don’t think it is anybody’s baseline forecast. So it’s something to watch if there is a real escalation there, then markets will take fright and that would have ramifications for the oil price,” Daiwa Capital economist Chris Scicluna said.

Iran said it will not abandon its right to uranium enrichment, a senior Iranian official told Reuters on Thursday, adding that a “friendly” regional country had alerted Tehran over a potential military strike by Israel.

Classic safe-haven assets got a lift. The Swiss franc and Japanese yen strengthened, pushing the dollar down 1% against the franc and down 0.67% against the yen, while gold rose about 0.9% to $3,382 an ounce.

Relief stemming from a positive conclusion to U.S.-China trade talks earlier this week, which President Donald Trump said was a “great deal with China,” evaporated by Thursday.

Adding yet another dose of market uncertainty, Trump said the U.S. would send out letters in one to two weeks outlining the terms of trade deals to dozens of other countries, which they could embrace or reject.

“Markets may have no choice but to respond to Trump’s tariff threat — even if it’s just posturing to bring others to the table. The gap between ‘risk-on’ positioning and real-world risks has stretched too far,” said Charu Chanana, chief investment strategist at Saxo Bank.

Trump’s erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit U.S. assets, especially the dollar, as they worried about rising prices and slowing economic growth.

The euro rose 0.74% to $1.15, touching its highest level since October 2021.

U.S. Treasuries also rallied in price, pushing yields down 5.1 basis points to below 4.363%, while two-year yields, which are more sensitive to inflation and interest-rate expectations, eased 2.7 bps to 3.918%.

Wednesday’s consumer inflation index kept alive the prospect of the Federal Reserve cutting rates by a quarter point, but only in September, as policymakers assess how tariffs work their way through the real economy.