Business

WASHINGTON, June 9 (Reuters) – The U.S. trade deficit narrowed in April as exports jumped to a record high, a trend that if sustained, puts trade on course to contribute to economic growth this quarter.

The trade gap contracted 1.2% to $55.9 billion, the Commerce Department’s Bureau of Economic Analysis and Census Bureau said on Tuesday. Data for March was revised lower to show the deficit at $56.6 billion instead of the previously reported $60.3 billion.

Economists polled by Reuters forecast the trade deficit shrinking to $56.2 billion in April. Trade has been a drag on gross domestic product for two straight quarters.

(Reporting by Lucia Mutikani; Editing by Andrew Heavens)

source

June 8 (Reuters) – Global ratings agency S&P said on Monday it had downgraded JetBlue Airways to “CCC+” from “B-,” pushing the carrier further into junk territory as high jet fuel costs hamper its recovery.

The low-cost carrier has been trying to restore profitability through cost cuts, network changes and efforts to improve operational reliability, but higher fuel prices have complicated its turnaround plans.

Budget and low-cost carriers have been particularly exposed to the fuel-price spike linked to the Iran war, with limited ability to pass on higher costs to consumers without risking demand in a price-sensitive travel market.

“Given the ongoing Middle East conflict and material rise in oil and jet fuel prices, we expect JetBlue’s operating performance to be significantly pressured over at least the next 12 months,” S&P said.

“A strong demand environment continues to support higher air fares, but we no longer expect positive free cash flow generation until 2028 and project leverage to be about 10x by the end of 2027.”

A deeper junk rating could raise JetBlue’s borrowing costs and limit its access to capital markets at a time when it may need additional liquidity to finance its operations.

In April, ratings agency Fitch also downgraded the New York-based carrier to “CCC+” from “B-” citing continued operating losses and negative free cash flow.

S&P kept its outlook on JetBlue stable, expecting the airline to maintain enough liquidity to cover projected free cash flow deficits through 2027, with no significant near-term maturities and no default or restructuring anticipated over the next 12 months.

Earlier this year, JetBlue secured a $500 million debt financing commitment backed by up to 22 aircraft, with an option to raise an additional $250 million.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Leroy Leo)

source

Wall Street held steadier and recovered some of its sell-off from last week.

Oil prices, meanwhile, rose Monday following fighting between Israel and Iran, but they pared their biggest gains.

The S&P 500 added 0.3%, coming off its 2.6% drop from Friday that was its worst since October. The Dow Jones Industrial Average dipped 0.2%, and the Nasdaq composite climbed 0.9%.

Some of the best performers were companies that sell computer chips, memory and other products fueling the AI boom. They had plunged Friday amid worries that their prices had shot too high amid AI euphoria.

On Monday:

The S&P 500 rose 21.99 points, or 0.3%, to 7,405.73.

The Dow Jones Industrial Average fell 80.77 points, or 0.2%, to 50,786.01.

The Nasdaq composite rose 220.23 points, or 0.9%, to 25,929.66.

The Russell 2000 index of smaller companies rose 21.92 points, or 0.8% to 2,855.42.

For the year:

The S&P 500 is up 560.23 points, or 8.2%.

The Dow is up 2,722.72 points, or 5.7%.

The Nasdaq is up 2,687.67 points, or 11.6%.

The Russell 2000 is up 373.52 points, or 15%.

source

ChatGPT maker OpenAI filed preliminary paperwork that would open the door to it becoming a publicly traded company, the third in a powerhouse trio of artificial intelligence companies racing to Wall Street debuts.

The San Francisco-based company said Monday it has filed confidential paperwork with the U.S. Securities and Exchange Commission.

“We expect it to leak so we’re just announcing it,” the company said in a written statement. “We have not decided on timing yet; it may be a while because there are things we want to do that are likely easier as a private company. But it’s a complicated set of tradeoffs and this gives us the option to go public sooner if that ends up being best.”

OpenAI’s move follows its rival Anthropic’s June 1 disclosure that it is also moving toward an initial public offering of shares. Both are now following Elon Musk’s space company SpaceX, which has started an IPO roadshow pitching itself as an AI-focused space company.

OpenAI CEO Sam Altman first publicly floated the possibility of an IPO last fall, describing it as the “most likely path” for the company given its size and the need for vast amounts of capital to advance its technology.

OpenAI began in 2015 as a nonprofit dedicated to developing AI for the common good and is now a company valued at $852 billion.

Paving the way for going public was OpenAI’s decision last year to reorganize its business structure and convert itself into a public benefit corporation even as it remains technically under the control of a nonprofit.

Also clearing the way for an IPO was OpenAI’s victory against Musk in a federal jury trial last month. Musk, an OpenAI co-founder and early donor, had sued the company seeking to oust Altman from its leadership and unravel its conversion to a for-profit business. A judge dismissed the case after the jury found Musk filed his lawsuit too late.

OpenAI has not yet publicly disclosed how much money it is making or when it plans to turn a profit. Much like Anthropic and SpaceX, the company has been losing more money than it makes because of the huge costs of building AI. OpenAI faces its fiercest competition from fast-growing Anthropic, founded by ex-OpenAI leaders in 2021 and maker of the increasingly popular chatbot Claude.

In an April interview, OpenAI’s chief financial officer Sarah Friar declined to give a timeline for a potential IPO but said the company was already “acting with the good hygiene of a public company,” such as by measuring its revenue in the way a publicly traded firm would have to report earnings to the SEC.

“I want us to be ready,” she told The Associated Press. “I think it’s good to be able to tap the public markets. They’re much bigger than the private markets if you believe compute is a competitive advantage.”

She said OpenAI’s current valuation would make it one of the 15 biggest companies in the S&P 500.

She also said there is a “credentializing moment of being a public company.”

“At that point, people are checking your balance sheet, the SEC is governing you and so on,” she said.

In a separate statement Monday published around the same time as the announcement of the confidential filing, Altman outlined a broad vision for OpenAI that including three big goals: building an automated AI researcher, accelerating economic growth and giving “everyone on Earth a personal AGI,” which stands for artificial general intelligence or a form of AI that surpasses humans at many tasks.

source

By Jamie McGeever

ORLANDO, Florida, June 8 (Reuters) – The S&P 500 and Nasdaq rebounded on Monday from Friday’s tech-led rout, on news of an Israel-Iran detente and as investors bought back cheapened stocks. The recovery was fairly muted though, suggesting worries over interest rates and AI exuberance remain.

In my column today, I look at whether the adage that “economic expansions don’t die of old age, they’re murdered by the Fed” will apply to the AI-driven equity bull market. Friday’s selloff on the back of strong U.S. jobs data suggests it might.

If you have more time to read, here are a few articles I recommend to help you make sense of what happened in markets today.

1. Iran and Israel say they have halted strikes on each other for now

2. How a few AI chip giants warped Asia’s stock picking game

3. Nvidia clinches deals with South Korean giants including SK Group to advance AI boom

4. Oil market calm masks a host of unknowns: Bousso

5. Japan’s economy cools on weak capex in Q1, revised data shows

Today’s Key Market Moves

• STOCKS: South Korea -9%, Japan -4%, China -3%. Europe, UK little changed. S&P 500 +0.3%, Nasdaq +0.9%, Dow -0.2%.

• SECTORS/SHARES: “SOX” chip index +6%. Only three of 11 sectors on S&P 500 rise: tech, energy, consumer discretionaries. Intel +11%, Micron Technology +10%, Apple -2%.

• FX: Dollar dips slightly, USD/JPY holds above 160.00. KRW soars 2%, biggest EM climber; CLP down more than 1%, biggest EM decliner

• BONDS: JGB yields +5 bps; U.S. yields +4 bps at long end, curve bear steepens.

• COMMODITIES/METALS: Oil up ~1%.

Today’s Talking Points

* Lacking luster

After Friday’s selloff, a bounce on Wall Street on Monday was always likely. We got one, but it was pretty patchy, at least at a headline index level – the S&P 500 rose 0.3% after falling 2.6%, the Nasdaq rose 0.9% after sliding 4%, and the Dow slipped further after losing 1.3% on Friday. Only three of the 11 sectors in the S&P 500 rose.

This is all the more surprising given the Iran-Israel truce hopes. On the other hand, investors have had plenty of Middle East false dawns recently, and there was no pullback in bond yields to seize upon – longer-dated Treasuries actually rose on Monday.

* SpaceX in the City

This is the week. SpaceX lists on Friday, aiming to raise $75 billion, which will be the most ever for an IPO and value the company at an eye-watering $1.75 trillion. The mania is palpable, but there are good reasons for caution too.

SpaceX is changing who gets access to shares; it’s allowing an early exit for insiders; Elon Musk is not giving up control and can only be fired as CEO if he agrees to it; and it is still a loss-making business. Investors don’t seem to care about any of that right now though – demand is strong. Very strong.

* In Europe’s defense

Germany and France are scrapping a landmark project to develop and build a new-generation fighter jet, according to German sources, bowing to industrial rivalries over Europe’s most ambitious defense program.

The decision to end the core pillar of Europe’s largest defense project comes at a time when growing threats from Russia and the U.S. are piling pressure on Europe to re-arm itself. Monday’s development signals countries may be pursuing this on an increasingly unilateral basis.

What could move markets tomorrow?

• Developments in the Middle East

• Australia consumer sentiment (June)

• Taiwan trade (May)

• South Korea GDP (Q1, revised)

• Germany trade (April)

• Germany industrial production (April)

• Mexico inflation (May)

• Canada trade (April)

• U.S. trade (April)

• U.S. Treasury sells $58 billion of 3-year notes at auction

Want to receive Trading Day in your inbox every weekday morning? Sign up for my newsletter here.

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.

(Reporting by Jamie McGeever; Editing by Nia Williams)

source

By Kalea Hall

DETROIT, June 8 (Reuters) – A strike at a major supplier for General Motors’ trucks entered its second week on Monday with the United Auto Workers and Dauch Corp still unable to reach a deal, according to a local union official. 

“Unfortunately, we just walked away from the table. The company is trying to play games with words and not providing anything productive,” Josh Jager, bargaining chairman for Local 2093, said in a Monday afternoon statement, adding the union is working on another proposal to give back to the company.

“We’re still making progress,” he said.

Local 2093 represents about ​1,000 union workers at the plant in Three Rivers, Michigan. 

A spokesman for Dauch, formerly known as American Axle, said the company remains “in close communication with our customers regarding the work stoppage.”

 “We continue to have ongoing discussions with the union in hopes of promptly reaching a mutually beneficial and market-competitive contract,” he said.

The Dauch plant supplies axles and other components for GM’s full-size and midsize pickup trucks. 

Last week, sources told Reuters that GM had about two weeks of axle supply to continue production. 

A GM spokesman said Monday the company has not had any plants affected by the strike.

Workers at the Dauch plant in 2008 agreed to accept lower wages. Since then, the top wage has increased by $4 to $22 per hour, Jager said, while the union ​wants top wages at $30 per hour by 2030.

(Reporting by Kalea Hall; Editing by Cynthia Osterman)

source

By Noel Randewich

June 8 (Reuters) – Index provider MSCI confirmed on Monday it will apply existing rules for early inclusion of large IPOs in its Global Standard Indexes, likely clearing the way for SpaceX to join, which will fuel demand from passively managed investment funds.

Investment funds with trillions of dollars in assets track MSCI’s indexes, and they would have to buy shares of SpaceX if it is added to those benchmarks, adding to demand from funds tracking the Nasdaq 100 and FTSE ​Russell indexes.

SpaceX is raising $75 billion and targeting a $1.75 trillion valuation that would place it among the top 10 most ​valuable U.S.-listed firms, even as only around 7% of its listed shares will be freely tradeable at launch on June 12.

The rocket maker led by Elon Musk is expected to easily clear MSCI’s size and free-float thresholds for early inclusion in its indexes.

MSCI’s decision contrasts with S&P Global, which last week shut out SpaceX from quick inclusion in the S&P 500 index after deciding it would not change its criteria, including a rule that a company must be profitable.

SpaceX posted a net loss of $4.94 billion in 2025, even as revenue rose 33% to $18.67 billion.

The final IPO price ⁠is due to be set on June 11, with trading on Nasdaq starting the next day, which would put SpaceX on track to join MSCI’s indexes 10 trading days later, according to MSCI.

Passively managed funds tracking MSCI indexes had around $5.79 trillion in assets, according to an MSCI blogpost published in February.

Nasdaq has already ​made changes that will make it ​easier for SpaceX, Anthropic and ⁠other newly listed megacaps to join its Nasdaq 100 index.

SpaceX is set to be ​eligible for inclusion in both the Russell U.S. Equity Indexes and the FTSE Global Equity Index Series under the newly announced fast-entry rules from the index provider FTSE ​Russell.

(Reporting by Noel Randewich; Editing by Sonali Paul)

source

A Texas man is accused of using a fake boarding pass to get on a United Airlines flight before he was found hiding in a restroom, forcing the plane back to the gate before it could take off at Houston’s George Bush Intercontinental Airport, court documents say.

The 25-year-old Houston man was discovered on the plane bound for Los Angeles in mid-May as it was taxiing to a runway when a passenger alerted a flight attendant, according to authorities.

He was charged last week with impairing or interrupting operation of critical infrastructure facility. A message seeking comment was left with his attorney Monday.

Surveillance cameras showed the man first having trouble with his boarding pass at a Transportation Security Administration checkpoint when he arrived at the Houston airport early on May 18, according to a criminal complaint.

He was eventually screened at the checkpoint and then tried to board a different flight to LA, but he was turned away when he tried to scan his pass, the complaint said.

About two hours later, the man went to another gate and waited until United employees who were checking boarding passes became distracted, the court document said. He then pretended to show his pass, walked by the employees and boarded the plane, the complaint said.

TSA said in a statement that the man first presented a valid boarding pass and went through standard screening and did not have any prohibited items. It referred other questions to Houston police and United Airlines. United referred all questions to law enforcement.

Once onboard the flight, the man tried to find a seat before going into a bathroom and a passenger noticed and told a flight attendant, the complaint said. He gave the flight attendant a fake name and then it was discovered he was not a passenger on the flight, the court document said.

Everyone on the flight had to get off the plane while it was checked for explosives, delaying its departure by three hours, the complaint said.

A United employee later told authorities the man had made a reservation, but it was canceled because he did not pay for it, the court document said.

He did show Houston police a confirmation number on his phone and what looked like a boarding pass, but a United employee told authorities the pass was fake and could not have been obtained without payment, the complaint said.

source

By Alessandro Parodi, Tassilo Hummel and Joanna Plucinska

LONDON/PARIS/GDANSK, June 8 (Reuters) – As soaring jet fuel prices triggered by the Iran war send ripples across the global travel market, a wealthy elite of CEOs, celebrities and sports stars is flying by private jet in greater numbers than ever before, to glitzy events from the Monaco Grand Prix to the Cannes film festival.

The phenomenon is another sign of the so-called “K-shaped” economy that is showing up across consumer markets from luxury to dining, industry watchers say, as high-income travellers spend more while middle- and lower-income groups tighten their belts, with budget carriers in particular feeling the squeeze.

Jet fuel costs have roughly doubled since the start of the war in late February, forcing global airlines to cancel flights and raise ticket prices, while missile and drone strikes around the Gulf have seen flights almost halve in a region that was a global connection hub.

“The world is in turmoil, but not our passengers,” Deniz Weissenborn, owner of Platoon Aviation, which charters eight-seat jets, told Reuters, explaining that its clients are wealthy enough to absorb higher prices.

“If you fly in a private jet, I don’t think you’re bothered by an increase of 1,000 or 2,000 euros.”

According to aviation data firm WINGX, the number of private flights has increased by about 4% globally so far this year, adding thousands of trips. In the same period, overall global capacity has fallen 3-4%, data from aviation analytics firm Cirium shows.

‘AS BUSY AS EVER’

Private jet pilots and executives told Reuters that charter jet services are seeing an uptick in bookings as wealthy travellers turn away from premium, business and first class in an effort to dodge the risk of commercial flight cancellations and airport disruption due to the conflict.

Amalfi Jets founder and CEO Kolin Jones said there had been around a quarter more requests for Cannes this year compared to last, while those for Sunday’s Monaco GP were up almost a third, as people switched up from commercial flights.

“Lots who could afford it but flew commercial are now happy to pay more for the safer option,” Jones said. “Cannes Film Festival, Monaco Grand Prix, and World Cup-related travel from Europe to the U.S. are driving demand.”

Eight private jet executives said that while private traffic to the Middle East had dipped given airspace safety concerns, demand for travel to Europe and the United States was likely to approach record levels this year.

“It is as busy as ever,” said Andy Spencer, a private jet pilot who has flown routes in the Middle East and Asia.

During early February’s U.S. Super Bowl in California, private traffic at nearby airports was three times that of a normal day, WINGX told Reuters. For April’s Masters Golf Tournament in Augusta, private traffic was 10 times more than normal, jumping from fewer than 50 flights to more than 400.

“Our customers’ flight hours continue to hit record highs month after month,” private jet maker Embraer’s CEO Francisco Gomes Neto told Reuters at an executive aviation airshow in May in Sao Paulo, Brazil.

‘PEOPLE FEEL SAFE WHEN THEY HAVE CONTROL’

Private jets have come in for criticism from climate groups and campaigners, who say their use underscores global inequality, is a threat to the environment and that regulation of the sector is too lax.

A spokesperson for the European Business Aviation Association said the sector played an important role in Europe’s connectivity and criticism was overly simplistic, while manufacturers and charter operators added that well-heeled individuals were simply looking for more security in uncertain times.

“Every time there are world events, private aviation gets a little bit of a bump, every single time,” said Jason Middleton, owner of Silver Air Private Jets, citing the Iran war, the Covid pandemic and unrest in South America.

“It’s like a safety thing…People feel safe when they have control.”

(Additional reporting by Gabriel Araujo; Editing by Adam Jourdan, Kirsten Donovan)

source

In his first comments since the exchange of fire, U.S. President Donald Trump wrote online: “Israel and Iran must immediately stop ‘shooting.’”

Two regional officials said concerted diplomatic efforts were underway Monday to salvage the ceasefire between Iran and the United States.

One of the officials, who is involved in mediation efforts between Iran and the U.S., said the Pakistan-led mediators were furious about the Israeli strike Sunday on Beirut’s southern suburbs, which came while Pakistan’s interior minister was in Tehran in a fresh bid to push U.S.-Iranian negotiations forward.

Iran launched waves of attacks on Israel on Monday, and Israel launched strikes on central and western Iran. It was their first exchange of fire since the ceasefire.

Iranian state television reported the sound of explosions being heard in Isfahan, Karaj, Tabriz and Tehran, without immediately elaborating. Iran closed the airspace around Tehran’s Imam Khomeini International Airport after the Israeli attack.

The semiofficial Fars and Mehr news agencies said Israeli strikes hit a petrochemical factory in the city of Mahshahr in Khuzestan province. They did not elaborate on any damage. The Israeli military later confirmed the strike on the petrochemical plant and also said it targeted truck-based missile launchers.

Israel said its strikes were in response to an Iranian missile attack. Tehran had warned on Sunday it would retaliate after Israel struck Beirut’s southern suburbs without warning. When Israel struck back, Iran fired again.

Iran’s paramilitary Revolutionary Guard said it had targeted two military bases in Israel, describing the attacks as being part of Operation Nasr, or “Victory.” The Guard said it launched the missiles after Israel targeted radar sites in three areas of Iran.

Explosions could be heard in central Israel as air defenses sought to intercept incoming Iranian fire. Sirens also sounded across neighboring Jordan.

Iran blamed the United States for the escalation.

“No one believes that the Israeli regime would take any action without coordination with the United States,” Iranian Foreign Ministry spokesman Esmail Baghaei said during a briefing with journalists in Tehran. “The United States bears responsibility for the Israeli regime’s aggression.”

The White House did not respond to messages about Monday’s Israeli strikes and whether they were done in coordination with the U.S.

The differences between the leaders appear to be rooted in the domestic considerations of each. Netanyahu faces elections this fall and is under heavy public pressure to strike back against ongoing Hezbollah attacks on northern Israel. He also is wary of appearing too subservient to Trump.

The U.S. president, meanwhile, also faces elections — for Congress in November — and is eager to wrap up a war that has jolted the global economy and raised prices for consumers.

Yemen’s Iran-backed Houthi rebels claimed an attack on Israel on Monday and said Israel-affiliated vessels would again be a target in the Red Sea, putting the waterway, as well as the Gulf of Aden and the narrow Bab el-Mandeb Strait connecting them, in danger. The statement from Brig. Gen. Yahya Saree was broadcast on the Houthis’ al-Masirah satellite news channel.

The threat might serve to further drive up oil prices since Saudi Arabia is using its East-West Pipeline to export oil through the Red Sea as an alternative to the Strait of Hormuz.

The Houthis made a similar threat during the Israel-Hamas war in the Gaza Strip and killed at least nine mariners and sank four ships in over 100 attacks, often targeting vessels with tangential or no ties to Israel.

source