Investing.com - U.S. stock futures stabilized Friday, but Wall Street was still on course for a losing week as debt concerns lifted Treasury yields. BYD (SZ:002594) outsold Tesla in Europe for the first time, Apple is offering trade-in discounts in China, while a trade deal between the U.S. and the European Union still seems a far way off.
1. U.S. futures fall on elevated Treasury yields
U.S. stock futures steadied Friday after previous losses, with elevated U.S. Treasury yields weighing on sentiment as President Donald Trump’s tax bill makes its way through Congress.
At 03:20 ET (07:20 GMT), Dow futures rose 40 points, or 0.1%, and S&P 500 futures traded 3 points, or 0.1%, higher, while Nasdaq 100 futures slipped 3 points, or 0.1%.
All three indices are on pace for losses this week, with the broad-based S&P 500 down nearly 2%, the blue chip Dow Jones Industrial Average around 1.9% lower, and the tech-heavy Nasdaq Composite set for a 1.5% drop.
The House of Representatives passed Trump’s tax and spending bill with only one vote to spare on Thursday, and it now goes to the Senate, where more heated debate is likely.
Republicans broadly agree on the main planks of the legislation, including the extension of Trump’s 2017 tax cuts, but there remains concerns that the measure does not sufficiently cut spending.
The nonpartisan Congressional Budget Office estimates it will add $3.8 trillion to the federal government’s $36.2 trillion in debt.
Worries about the cost of the measure – and its impact on the nation’s debt and deficit – sent long-term Treasury yields higher. The 30-year Treasury bond yield touched a high of 5.161%, its highest level since October 2023, while the 10-year Treasury note breached 4.6%.
2. BYD outsells Tesla in Europe for first time
Electric vehicle market leader Tesla (NASDAQ:TSLA) received another blow Friday following the news that Chinese EV giant BYD outsold its U.S. rival for the first time in Europe.
A report from analytics firm JATO Dynamics said BYD registered 7,231 battery-powered vehicles in Europe in April, overtaking the 7,165 units registered by Tesla.
BYD’s sales also came despite the European Union imposing steep import tariffs on Chinese EVs last year.
“Although the difference between the two brands’ monthly sales totals may be small, the implications are enormous,” said Felipe Munoz, a global analyst at Jato Dynamics. “This is a watershed moment for Europe’s car market, particularly when you consider that Tesla has led the European BEV market for years, while BYD only officially began operations beyond Norway and the Netherlands in late 2022.”
Tesla is struggling with slowing sales across the globe, with the company logging its first ever drop in annual deliveries in 2024.
3. U.S.-EU trade deal still far away - FT
Equity markets globally received a boost with the trade deal between China and the U.S. earlier this month, but further good news in the form of an agreement between the European Union and Washington still looks far away.
U.S. trade negotiators are pushing the EU to make unilateral tariff reductions on U.S. goods, saying without concessions the bloc will not progress in talks to avoid additional 20% "reciprocal" duties, the Financial Times reported on Friday.
The FT added that the European Union has been pushing for a jointly agreed framework text for the talks but the two sides remain too far apart.
The U.S. imposed 25% tariffs on EU cars, steel and aluminium in March and 20% tariffs on other EU goods in April. It then halved the 20% rate until July 8, setting a 90-day window for talks to reach a more comprehensive tariff deal.
In response, the 27-nation EU suspended its own plans to impose retaliatory tariffs on some U.S. goods and proposed zero duties for all industrial goods on both sides.
4. Apple offers trade-in discounts in China
Apple (NASDAQ:AAPL) is offering additional trade-in discounts for new iPhones in China until June 18, according to its website on Friday, in what appears to be the latest attempt by the tech giant to boost sales in this vital market.
Apple’s market share in China has shrunk significantly, falling from 15.6% in the first quarter of 2024 to 13.7% in the first quarter of this year, resulting in the U.S. company falling to fifth place in the Chinese smartphone market, behind Xiaomi (OTC:XIACF), Huawei, Oppo, and Vivo.
This is a significant drop, as Apple was previously the market leader in China.
The company is also facing severe headwinds from high U.S. trade tariffs on China, which stand to severely increase the prices of its devices. Over 90% of Apple’s flagship iPhones are manufactured in China, while the country is also Apple’s largest market outside North America.
5. Crude set for weekly decline on supply pressures
Oil prices retreated Friday, on course for their first weekly decline in three weeks, weighed down by renewed supply pressure with OPEC+ considering another increase in production levels.
At 03:20 ET, Brent futures dropped 0.7% to $63.99 a barrel, and U.S. West Texas Intermediate crude futures fell 0.7% to $60.80 a barrel.
For the week, both benchmarks have fallen around 2%, falling to their lowest in more than one week, following two weeks of gains.
The Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, are weighing the possibility of another production boost at their upcoming meeting on June 1, Bloomberg News reported Thursday.
According to delegates cited in the report, one option under consideration is a supply increase of 411,000 barrels per day in July, though no final decision has been made.
The market is also closely watching U.S.-Iranian nuclear negotiations which could determine the future supply of Iranian oil. The fifth round of talks will take place in Rome later Friday.
(Reuters contributed reporting.)