Business

By Michael S. Derby

NEW YORK, May 8 (Reuters) – Strong U.S. hiring data in April dealt prospective Federal Reserve Chair Kevin Warsh’s hopes of cutting interest rates a setback on Friday, giving officials greater latitude to use monetary policy to tackle increasingly high inflation.

The U.S. economy added 115,000 new jobs in April, exceeding analysts’ forecasts, following an upwardly revised job gain of 185,000 in March. The April job gain was well above the amount of job creation many analysts say is needed to keep the job market steady. The unemployment rate held steady at 4.3%.

The hiring indicates the U.S. job market continues to do well at a time when inflation pressures are mounting on the back of the ongoing impact of President Donald Trump’s import tax hike coupled with surging energy prices caused by the Iran war.

The data diminished what were already low odds that the Fed can cut interest rates later this year and strengthens the hand of the substantial number of Fed officials who are worried about inflation and want to hold rates steady for an extended period.

“The labor market is not booming, but it is proving harder to break than many feared,” said Olu Sonola, head of U.S. economics at Fitch Ratings. “If unemployment stays this stable, the Fed’s attention shifts back to inflation,” Sonola said, adding that if price pressures remain robust “the Fed’s easing bias is unlikely to survive much longer”.

The market now expects just an 18% chance of an interest rate increase at the Fed policy meeting in December, according to the CME’s FedWatch. It was at roughly 23% late Thursday. At the same time, the chances of the Fed keeping rates steady rose to 74.1%, compared with 70.1% the day before.

TIME FOR NEUTRALITY

The Federal Open Market Committee last week held its interest rate target range at 3.50%-3.75% and maintained a leaning towards further rate cuts in its policy statement.

That drove three regional Fed bank presidents to dissent, and in subsequent comments, they explained uncertainty over the outlook and the risks created by the Iran war mean it could even be possible the Fed would have to raise rates at some point.

Cleveland Fed President Beth Hammack said in a radio interview on Thursday, “I think our statement should ⁠have a pretty neutral stance about whether the next move is down or up or just on hold for a ​really long period of time”.

The diminished odds of a Fed rate cut come as Warsh is zeroing in on Senate confirmation to succeed Jerome Powell, whose term ends on May 15.

Warsh has expressed interest in cutting interest rates but as of now, is likely to find few takers given mounting energy prices and an unresolved war that increases the odds price pressures will mount further the longer the conflict goes on.

Warsh may be further boxed in on the policy front as Powell intends to stay on in a governor slot that runs until 2028 while he seeks assurance Trump administration legal investigations targeting the central bank are over.

While Powell said “I’m not looking to be … a high-profile dissident ​or anything like that” at the FOMC meeting press conference, his presence will likely strengthen the positions of those who oppose rate cuts.

In a TV interview Friday, Fed Governor Stephen Miran reiterated his case for cutting rates, arguing that the current monetary policy stance is likely holding the job market back.

Miran, who is serving after his term expired and will have to leave when Warsh is confirmed, also said he hopes Powell staying on is “transitional” and not a “nefarious” move that would muddy the waters of who is actually running the Fed. 

(Reporting by Michael S. Derby and Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Alexander Smith)

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WASHINGTON (AP) — The Trump administration has reached a proposed settlement in an antitrust case against a data-sharing company for the meatpacking industry that the federal government had accused of helping drive up grocery prices.

Justice Department officials touted the deal in the case, initially brought by the Biden administration, as a victory in their effort to reclaim competitive prices in the meat industry and lower food costs for Americans. Combating the drivers of high food costs, however, is challenging and the solutions aren’t simple.

“A stable and affordable food supply is critical to our country’s well-being,” acting Attorney General Todd Blanche said in a statement. “This Department of Justice is laser-focused on making everyday life affordable for all Americans.”

The case targeted Agri Stats, an Indiana-based company that collects nonpublic information from meat processors and shares the data in detailed reports with the industry. The federal government alleged its practices allowed chicken, pork and turkey processors to inflate prices they charged restaurants, grocery stores and other buyers who were not allowed access to Agri Stats’ data.

Under the proposed settlement, Agri Stats would be required to share with U.S. buyers most of the information it collects from processors, the Justice Department said.

Agri Stats’ president said it was “pleased to put this case with the Department of Justice and six states behind us.”

“Agri Stats has been instrumental in the efficiency improvements in the chicken industry that have made such wonderful results possible, and we look forward to continue helping our subscribers improve their businesses, which will make chicken more affordable for all Americans,” Eric Scholer said in a statement.

The Justice Department is separately investigating potential antitrust violations in the beef processing industry. That followed a request from President Donald Trump to open an investigation into whether foreign-owned meat packers were driving up the price of beef in the U.S.

U.S. beef prices have been climbing steadily since 2020 and are near record highs. In March, a pound of ground beef averaged $6.70, or 16% higher than a year ago, according to government figures.

But there are many reasons for that, including drought and a shrinking herd size.

A three-year drought that began in 2020 left less grass for grazing across the U.S. and made feed costs soar. Dry weather has persisted; this spring, around 63% of the U.S. cattle herd is in drought areas, according to the USDA.

The U.S. cattle herd, which has been shrinking for decades, is now at its smallest size since 1951, according to the USDA. Thanks to changes in cattle genetics and feeding techniques, ranchers now get more meat from each animal than they used to. But they’re reluctant to increase herd sizes because of the high costs of feed and labor and the dry weather.

Another driver of high prices is the closure of the U.S.-Mexico border to livestock imports to slow the spread of a flesh-eating parasite called the New World screwworm. The closures that began in late 2024 have stopped about 1 million cattle from being hauled from Mexico into the U.S.

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Associated Press reporter Dee-Ann Durbin in Detroit contributed to this report.

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May 8 (Reuters) – Top Australian investment bank Macquarie reported its biggest annual profit in three years on Friday, beating market consensus, as its key commodity division benefited from a rise in client hedging activity amid heightened market volatility.

Shares of the company jumped about 3% in early trade to a record high of A$249.49, while the benchmark stock index was down 1.1%.

Income from the Commodities and Global Markets (CGM) segment, Macquarie’s top profit-making division, jumped nearly 50% to A$4.22 billion ($3.04 billion) as the Iran war sent oil prices soaring above $100 a barrel and roiled global markets.

Its market-facing commodities business, which provides financing and lending to clients in commodity and financial markets, benefits from trading during bouts of market volatility.

Macquarie said CGM’s contribution was primarily fuelled by client hedging activity across the Global Gas and Power and Global Oil units, coupled with higher trading income from supply and demand imbalances in North American Gas and Power and oil trading.

It was also boosted by the disposal of its OnStream meters platform earlier this year. Macquarie had bought the platform as part of an acquisition of a UK smart meters business in 2025 for around 900 million pounds ($1.22 billion).

Combined with the strong performance of its market-facing and annuity-style businesses, Macquarie’s full-year net profit after tax attributable jumped to A$4.85 billion, beating a Visible Alpha consensus of A$4.39 billion and up 30% from A$3.72 billion in the previous year.

“Macquarie is positioning itself for future deployment opportunities, and we expect that they are more confident around opportunities in CGM given potentially higher-for-longer commodity volatility,” Citi analysts said in a note.

Sydney-headquartered Macquarie said it would conclude its on-market share buyback programme, stating strong business growth and prevailing market conditions meant no further purchases were expected.

The lender had extended the A$2 billion share buyback programme by 12 months in November after repurchasing A$1.01 billion worth of shares as of November 7. It said it had made no purchases since then.

Macquarie declared a final dividend of A$4.20 per share for the year, up from A$3.90 apiece in 2025.

($1 = 1.3883 Australian dollars)

($1 = 0.7380 pounds)

(Reporting by Nikita Maria Jino and Sherin Sunny in Bengaluru; Editing by Tasim Zahid, Jonathan Ananda and Subhranshu Sahu)

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NEW YORK (AP) — People who buy luxurious second homes in New York City, but live most of the year elsewhere, would have to pay a new tax on the properties under a tentative agreement — an initiative to appease Mayor Zohran Mamdani and liberal voters who launched him into office with chants of “tax the rich.”

But the deal, part of a sprawling budget plan announced Thursday by Gov. Kathy Hochul, would stop short of a major priority for the mayor: a broad tax increase on the state’s wealthiest residents.

The proposed tax on multimillion-dollar second homes, known as pied-à-terres, comes as Democrats are trying to address voter concerns about affordability ahead of this year’s midterm elections without alienating the business community.

Critics, including prominent business leaders, Republicans, and some moderate Democrats, have warned that slapping new taxes on rich people who maintain apartments and townhouses in New York, but don’t consider it their primary home, will just lead the very wealthy to abandon the city.

The details of the proposal are not yet finalized, but Hochul said it would apply to homes worth over $5 million. It would only apply to second homes in New York City, not other state playgrounds for the rich, like Long Island’s mansion-dotted Hamptons.

Hochul estimated the tax would bring in at least $500 million for the city annually.

After the governor’s announcement, the state’s legislative leaders warned that much was still left to be negotiated. “There is no budget deal,” said Carl Heastie, Democratic speaker of the state Assembly, adding that much of the financial backbone of the budget had yet to be decided.

Meanwhile, the New York City chapter of the Democratic Socialists of America, of which Mamdani is a member, blasted out text messages to supporters saying the budget proposal doesn’t go far enough to close New York City’s multibillion-dollar budget deficit or fund needed social programs.

“Hochul is trying to shove a deal down our throats with no new taxes on the rich besides the pied-a-terre tax, which only fills 10% of NYC’s deficit,” the organization’s co-chair, Gustavo Gordillo, said in a statement.

Hochul, a Democrat running for reelection, opposes broader tax hikes on the rich, saying it risks encouraging wealthy residents and businesses to flee to lower-tax states.

“We were able to accomplish this extraordinary budget, with all these accomplishments, without raising statewide taxes at all,” Hochul told reporters Thursday.

Mamdani has cast the pied-a-terre tax as a victory, while still pushing — sometimes in personal terms — for more, targeted tax hikes on the very wealthy.

Last month, the mayor, seeking to boost excitement about the new tax plan, posted a video of himself standing outside a luxury building where billionaire hedge fund CEO Ken Griffin purchased a penthouse for about $239 million.

“When I ran for mayor, I said I was going to tax the rich,” Mamdani said in the clip, which has been viewed on X more than 52 million times, before mentioning Griffin by name. “Well today, we’re taxing the rich.”

Griffin later said he was shocked by the video, calling it “frightening,” and potentially threatening to his safety. He added that the CEO of UnitedHealthcare, Brian Thompson, had been shot to death in the same neighborhood, allegedly by someone upset about perceived corporate greed. Griffin said his company has decided to expand its operations in Miami.

“What the mayor of New York has made clear to my partners, and principally my New York partners, is we need to double down on our bet in Miami,” he said at an economic conference in California this week. “Because we want to be in a state that embraces business.”

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May 7 (Reuters) – Biopharmaceutical company Odyssey Therapeutics has raised $279 million in its upsized U.S. initial public offering, the company said on Thursday.

The Boston-based company sold 15.5 million shares at $18 apiece, compared with its marketed range of $16 to $18 per share.

U.S. biotech IPOs have seen a revival in 2026 amid President Donald Trump’s policy shifts and sweeping changes to the U.S. Food and Drug Administration.

Drug developers Seaport Therapeutics, Hemab Therapeutics, biotech firm Alamar Biosciences, and weight-loss drug developer Kailera Therapeutics are a few companies to tap the equity market in the past few weeks. 

Odyssey focuses on developing treatments for autoimmune and inflammatory ​diseases. Its treatment, OD-001, is in a mid-stage trial for ulcerative colitis, one of the two main types of inflammatory bowel disease.

Founded in 2021, the company has raised approximately $726.5 million from over 30 investors.

The company was founded by Dr. Gary D. Glick, who also serves as chief executive officer and previously founded Scorpion Therapeutics, which was acquired by Eli Lilly in 2025 for up to $2.5 billion in cash.

The company plans to use the proceeds primarily for clinical development of OD‑001 and for other general corporate purposes.

J.P. Morgan, TD Cowen, ​and Cantor are among the underwriters for the offering. It intends to begin trading on Nasdaq on Friday under ​the symbol “ODTX”.

(Reporting by Pragyan Kalita in Bengaluru and Natalia Bueno Rebolledo in Mexico Ciry; Editing by Subhranshu Sahu and Rashmi Aich)

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By Colleen Howe

BEIJING, May 8 (Reuters) – Oil prices were up more than 1% on Friday after renewed fighting broke out between the U.S. and Iran, threatening a shaky ceasefire and dashing hopes for progress on reopening the Strait of Hormuz, a key oil and gas transit route.

Brent crude futures were up $1.41, or 1.41%, at $101.47 a barrel as of 0123 GMT. West Texas Intermediate (WTI) U.S. crude futures rose by $1.12, or 1.18%, to $95.93 a barrel. At the market open prices had risen by more than 3%.

That snapped three days of declines on reports earlier this week the U.S. and Iran were close to agreeing to a deal that would end the fighting and allow the Strait of Hormuz to fully reopen but put off larger issues around Iran’s nuclear programme.

For the week, both contracts are set to fall about 6%.

Friday’s jump in prices followed Iran’s accusations the U.S. violated the month-long ceasefire between them, while the U.S. said its attacks were retaliatory strikes following Iranian fire on Thursday on its navy ships transiting through the strait.

Iran’s military said the U.S. had targeted an Iranian oil tanker and another ship and civilian areas in the strait and on the mainland.

Despite the renewed combat, U.S. President Donald Trump told reporters later on Thursday the ceasefire was still in effect.

The exchange of fire happened as Washington awaited Iran’s response to the latest peace proposal, which did not address a number of contentious issues including the U.S. demand to reopen the strait, a conduit for one-fifth of the world’s oil and gas supply before the war that has been mostly shut since the conflict, which also included strikes by Israel, began on February 28.

“On the supply front, the picture remains tight,” IG analyst Tony Sycamore said in a note, while saying a peace deal remains elusive.

Separately, the U.S. Commodity Futures Trading Commission is investigating oil price trades totalling $7 billion ahead of key Iran war-related announcements by President Trump, Reuters reported on Thursday.

Most of the trades involved short positions, or bets on prices falling, placed on the Intercontinental Exchange (ICE) and Chicago Mercantile Exchange (CME) before Trump’s statements to delay attacks or announce a ceasefire that led to prices falling.

(Reporting by Colleen Howe; Editing by Chris Reese and Christian Schmollinger)

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SINGAPORE, May 8 (Reuters) – Oil rose and U.S. stock futures slipped in early trade on Friday, after the United States and Iran exchanged fire and put a month-long Middle East ceasefire in doubt.

U.S. crude futures, which are lower for the week, jumped more than 2% from Thursday’s close to $96.8 a barrel.

S&P 500 futures slipped about 0.2% and Nikkei futures pointed to a slightly lower open for Japanese shares, which soared to record highs on Thursday. [.T]

Iran’s top joint military command said the U.S. targeted an Iranian oil tanker and another ship entering the Strait of Hormuz.

The U.S. military said it acted in self-defence after Iran attacked Navy destroyers that were passing through the strait. It said Iran did not hit any U.S. assets in the attack and U.S. President Donald Trump told ABC News that the ceasefire with Iran remained in place.

The strikes occurred while Washington awaited Iran’s response to a U.S. proposal that would halt fighting but leave the most contentious issues, such as Iran’s nuclear programme, unresolved for now.

In foreign exchange markets, the rising tension lifted the dollar off its recent lows and set it on course to finish the week mostly steady.

The yen has struggled to strengthen past 155 to the dollar, despite data suggesting that authorities in Tokyo may have sold as much as $67 billion in defence of the currency this week and last.

The yen last traded at 156.88 per dollar and the euro at $1.1726. U.S. Treasury Secretary Scott Bessent is due to visit Tokyo next week and markets will be on alert for any comments he might make on the yen or Japan’s monetary policy, given his past remarks in favour of speedier Japanese rate hikes.

Investors await the U.S. non-farm payrolls report on Friday, with jobs expected to have increased in April by 62,000 after rebounding 178,000 in March, a Reuters survey of economists shows.

(Reporting by Tom Westbrook; Editing by Edmund Klamann)

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Both engines were shut off and there was a cockpit struggle before a China Eastern Airlines jet slammed into a mountain in 2022 and killed all 132 people aboard, newly released data released by American investigators suggests.

In response to a public records request, the National Transportation Safety Board released a report recently on what the Boeing 737-800’s flight data recorder revealed. The NTSB became involved in the Chinese investigation because the plane and engines were made by American companies and the U.S. investigators are regarded as the world’s leading experts on analyzing black boxes after a crash.

The report offers the best explanation yet about what caused the crash and confirms news stories at the time suggesting the crew may have played a role after Chinese investigators said they did not immediately find a problem with the plane.

Aviation safety experts agree that the data shows the fuel to both engines was cut off and someone sent the plane into a nosedive and a 360-degree roll, but it does not conclusively show exactly what happened because the Civil Aviation Administration of China has yet to release its final report than four years later. International standards call for investigators to strive to release their report by roughly a year after a crash.

The NTSB report was released May 1.

By design the fuel levers in a 737 cannot be easily bumped or shut off inadvertently — someone has to pull them out to release them before they will move. John Cox, CEO of Safety Operating Systems, said the levers lock into place, so it’s likely that someone deliberately moved them both to the cutoff position.

The data ended while the plane was still at 26,000 feet (7,900 meters) of altitude after the flight recorder and all the plane’s hydraulic systems lost power, but the report of the 12 minutes before that suggests what happened.

The cockpit voice recorder, which continued working because it had a battery backup, could also help shed light, but the NTSB did not release a transcript of what it found on those recordings. It is up to Chinese authorities to release those details.

Jeff Guzzetti, who formerly investigated crashes for the NTSB and the Federal Aviation Administration, said the flight data suggests a struggle and the crash could have been a pilot suicide. There have been a number of previous instances of that, including a Germanwings flight that crashed into the French alps in 2015, killing everyone aboard.

“Typically when you want to roll an airplane, it’s a smooth movement of the control wheel in one direction. But here you have it moving back and forth, back and forth, as if someone is trying to counter the initial movement of the roll,” Guzzetti said. “So it’s not conclusive, but it sure has the earmarks of a struggle in the cockpit.”

The details about this crash will renew longstanding industry concerns about how to ensure pilots’ mental health.

Many are reluctant to come forward and seek help for fear they could lose their medical certification and be grounded. Getting recertified can take months or longer during which a grounded pilot is not getting paid. Meanwhile some countries prohibit pilots from taking common psychiatric medicines such as antidepressants.

“Clearly pilots — and very understandably so — are oftentimes reluctant to come forward, knowing that to get recertified after having gone through a mental health evaluation, it can be very arduous and very lengthy,” Cox said.

Guzzetti said the co-pilot of an Egypt Air plane that crashed in 1999 is believed to have deliberately sent it into the ocean off New York. In 2023, in an incident that did not end in a crash, an off-duty pilot who took psychedelic mushrooms days beforehand tried to cut the engines of a Horizon Air flight while riding off-duty in the cockpit.

The jet was flying from Kunming in the southwest to Guangzhou, near Hong Kong, when it went into a nosedive at about 8,800 meters (29,000 feet), appeared to recover but then slammed into the mountain. The crash left a 65-foot (20-meter) crater and set the forest on fire.

The crew reported no problems before losing contact with air traffic control. Chinese investigators said no abnormalities were found among the plane or crew or with outside elements such as bad weather.

Cox also said the new report from the NTSB does not indicate any problem with the plane.

The March 21, 2022, crash was a rare failure for the Chinese airline industry, which dramatically improved safety following deadly crashes in the 1990s. China Eastern is one of four major state-owned airlines in the country.

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McDonald’s posted better-than-expected sales in the first quarter as a new burger — and a continuing emphasis on value — brought in customers.

The company said its global same-store sales, or sales at locations open at least a year, rose 3.8% in the January-March period. That was better than the 3.7% increase Wall Street was expecting, according to analysts polled by FactSet.

McDonald’s shares rose more than 3% before the opening bell Thursday.

The limited-time Big Arch burger —- a 1,020-calorie behemoth that went on sale in the U.S. last month — became a viral sensation after McDonald’s CEO Chris Kempczinski posted a video of himself taking a nibble from one. Kempczinski was mocked for his tentative bite. Tom Curtis, president of rival Burger King, posted his own video taking a vigorous bite of his chain’s new Whopper.

But the Big Arch did capture peoples’ attention. McDonald’s said U.S. customers spent more per visit in the first quarter than the same period a year ago. The Big Arch costs well over $8 in many locations.

At the same time, McDonald’s is emphasizing value to attract inflation-weary customers in the U.S. and abroad. The company cut prices on some U.S. combo meals in September, and Kempczinski said in February that those changes, along with other discounts, helped McDonald’s gain share among consumers with household incomes of $45,000 or less. That’s a segment that had been drifting away from McDonald’s for several years.

McDonald’s has been leaning even more heavily into deals as gasoline prices rise due to the Iran war. Starting April 21, McDonald’s U.S. stores began offering 10 items that each cost less than $3.

The Chicago chain said its revenue rose 9% in the first quarter to $6.52 billion. That was also higher than the $6.47 billion Wall Street was expecting, according to FactSet.

McDonald’s net income rose 6% to $1.98 billion. Adjusted for one-time items, the company earned $2.83 per share. That was also higher than analysts’ forecast of $2.74.

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By Mike Dolan

May 7 (Reuters) –

What matters in U.S. and global markets today

By Mike Dolan, Editor-at-Large, Finance and Markets

The chip boom goes on, with Asia seeing rolling catchups to this week’s tech surge as markets there return from holidays. Wednesday was South Korea’s turn, today was Japan’s.

Led by a near 20% leap in tech-focused SoftBank’s shares, the benchmark Nikkei index jumped almost 6% as Japan returned from the Golden Week holiday.

I’ll get into that and more below.

But first, check out my latest column on why a U.S.-Iran peace deal could knock the dollar further – and what could put a floor on that.

And listen to the latest episode of the Morning Bid daily podcast. Subscribe to hear Reuters journalists discuss the biggest news in markets and finance seven days a week.

CHIP FRENZY GOES GLOBAL

The Nikkei’s rise puts year-to-date gains in Tokyo at 25%. That’s a snip of the 75% boom in Seoul this year, but it still dwarfs the S&P 500’s 8% gain and even the Nasdaq’s 11% advance, showing that the biggest scramble for chips and tech equipment is overseas.

Wall Street continued its climb to new records, however, with the S&P 500 up another 1% on Wednesday as hopes of an Iran peace deal resulted in a nearly 8% retreat in crude oil prices.

Oil prices slid further heading into Thursday, with Brent and WTI crude now trading at around $99 and $93 per barrel, respectively. Bond yields fell as oil prices ebbed.

Europe’s STOXX 600 gained 2% on Wednesday, leaving it some 2% away from pre-Iran war levels, though the index paused in early trading on Thursday.

Iran is currently reviewing the latest U.S. proposal to end the war, which would reportedly kick off 30 days of detailed negotiations to reach a full agreement. Despite the renewed peace hopes, however, military activity in the Gulf and Lebanon continued sporadically.

Back in the macroeconomic world, the build-up to Friday’s U.S. payrolls release has shown little damage to hiring so far from the two-month energy shock. ADP’s private sector jobs readout for April came in ahead of expectations.

Elsewhere, eyes are drifting to the upcoming Trump-Xi summit slated for next week, while Thursday brings local elections in the UK that promise to have a major bearing on Prime Minister Keir Starmer’s position as leader of the ruling Labour Party.

Chart of the day

The AI boom is not just on Wall Street – it’s arguably bigger around the world as chip and tech equipment makers soar across Asia, driving up its benchmark indexes.

Today’s events to watch

* U.S. weekly jobless claims (8:30 a.m. EDT), March consumer credit (3 p.m. EDT)

* New York Fed’s John Williams, Minneapolis Fed’s Neel Kashkari and Cleveland Fed’s Beth Hammack all speak

* U.S. corporate earnings: Airbnb, CoreWeave, McDonald’s

* UK local elections

Want to receive the Morning Bid in your inbox every weekday morning? Sign up for the newsletter here. You can find ROI on the Reuters website, and you can follow us on LinkedIn and X.

Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

(By Mike Dolan)

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