Latest Sectors News

In a live CNBC interview from his home district, Goolsbee declined to speculate on where he thinks interest rates are headed. View More

watch nowVIDEO4:1504:15Fed's Goolsbee: Inflation has been more disturbing on the services sidePower Lunch Two Federal Reserve officials on Thursday indicated some optimism on inflation, though neither indicated a likelihood that interest rates will change anytime soon.Chicago Federal Reserve President Austan Goolsbee said Thursday that inflation is still trending the wrong way though there have been a few bright spots. A little later in the afternoon, New York Fed President John Williams said he expects inflation readings to start trending lower.In a live CNBC interview from his home district, Goolsbee declined to speculate on where he thinks interest rates are headed. However, he said he remains squarely focused on inflation, in remarks that reflected sentiment new Fed Chairman Kevin Warsh expressed a week ago."You have seen now little bit of improvement on this services inflation, and I've been identifying that as something that we would want to see," Goolsbee said from the trading floor of the Cboe. "But right now, as between the two sides of the Fed's mandate, the inflation side and the job market side, clearly the problem's on the inflation side."The comments came hours after the Commerce Department reported that core inflation as gauged by the Fed's preferred benchmark, the personal consumption expenditures price index, stood at 3.4% in May, its highest since October 2023. Price increases were fairly evenly distributed, with goods rising 0.4% and services up 0.5%, the most since January. On the goods side, much of the gain was driven by energy, which jumped 6.5%, while services was pushed higher by transportation services, a sector sensitive to gas prices and which accelerated 0.8%.Markets expect the Fed could raise its benchmark rate in September, but Goolsbee wouldn't commit to where he would stand. He said he "applauded" Warsh's move to discourage such "forward guidance" from the Fed's communication. The Federal Open Market Committee's post-meeting statement was dramatically shorter than the norm, and the forward guidance language was removed."Let's streamline, let's take some forward guidance out of there. Let's not speculate about the rate path," he said. "I think it's healthy that we have those resets."Goolsbee dispelled the notion of rancor within the Fed now that Warsh has taken over. He noted that the two were "foxhole bodies" during the global financial crisis, when Warsh was helping devise rescue programs and Goolsbee was a senior economic advisor in the Barack Obama White House."He comes in with new ideas. He's a serious guy. You saw in the press conference that that he comes with a different style," Goolsbee said. "Before I was ever at the Fed, and since I've been at the Fed, I've been uneasy with the use of forward guidance and speculating about the future of rates on a routine basis." Williams sees reason for hope Williams, the New York Fed leader, said that he expects inflation readings to start trending lower though he is happy with interest rates at their current level.The influential policymaker's first remarks since last week's meeting indicate less concern about inflation though still not enough to talk about cuts."Given the elevated level of inflation, it is imperative that we restore it to our 2 percent longer-run goal on a sustained basis," Williams said in remarks at the Crane Money Fund Symposium in Jersey City, New Jersey. "The current stance of monetary policy is well positioned to do that."Williams cited three reasons he thinks inflation will ease: the waning impact from tariffs; hopes that the Iran war is nearing an end so energy prices will ease; and the expectation that shelter inflation will slow as rent increases moderate.Inflation, he said, will drop to 3.5% this year from its current 4.1%, and "continue on a glide path" back down to the Fed's 2% target by 2028."Like the World Cup tournament, the economy can take surprising and unpredictable turns," he said. "One thing that is certain is my unwavering commitment to supporting maximum employment and bringing inflation down to our 2 percent longer-run goal on a sustained basis."The FOMC next meets July 28-29, with markets expecting about a 30% chance of a hike, according to the CME Group's FedWatch. Goolsbee is a nonvoting participant at FOMC meetings this year but will get a vote in 2027. Williams is a permanent voter. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

A federal judge temporarily blocked Trump's limits on how much certain graduate students can borrow. That policy was set to go into effect July 1. View More

Julia Pentasuglio, a student at Loyola University and managing editor of The Loyola Phoenix newspaper, types on her laptop at the university newsroom in downtown Chicago, Illinois, Nov. 11, 2025.Carlos Barria | Reuters A federal judge temporarily blocked a new Trump administration rule that limits how much certain graduate students can borrow based on their field of study, days before that policy was set to go into effect. U.S. District Judge Beryl Howell in Washington froze, for now, some of the federal student loan caps established by the U.S. Department of Education. The department was implementing the limits set in President Donald Trump's tax and spending bill, the "one big beautiful bill act."Under the new regulations, previously set to begin on July 1, most graduate students are subject to a $20,500 a year borrowing cap, while so-called professional students can take out up to $50,000 annually. Previously, graduate students were able to borrow as much as their program cost to attend. The order, issued late on Wednesday, stays the Education Department's definition of a "professional degree." The Trump administration had identified 11 degrees, including medicine, dentistry and theology, that fit under that label. The Education Department is "reviewing the order and will take appropriate action," said Ellen Keast, press secretary for higher education at the agency. Read more CNBC personal finance coverageRepublicans buy crypto more than Democrats, data shows. What's driving the divideFederal student loans have a new interest rate discount — here’s who qualifiesAnnuity options are growing in 401(k)s, but adoption remains limitedIdentity theft victims face ‘unconscionable’ IRS delays, report saysCNBC's Financial Advisor 100: Best financial advisors, top firms rankedCNBC Elite Advisors: Top ultra-high net worth wealth management firms for 2026 The plaintiffs challenging the policy, including the American Association of Nurse Practitioners, argued that the rule "arbitrarily and capriciously" defined a professional degree, resulting in "profound consequences" for fields excluded from the category, such as nursing and education."We are pleased that those who rely on the Direct Loan Program to contribute to their communities by seeking degrees in nursing, public health, education, and marriage and family therapy will be able to do so," said Skye Perryman, the president and CEO of Democracy Forward, the liberal group that represented the plaintiffs. While Howell set aside the Trump administration's professional degree definition, she did not go as far as to block the government from enforcing the new graduate loan caps. She added that she could not remedy the plaintiffs' "primary frustration" over the end of uncapped borrowing. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Glyphosate, used in Roundup weedkiller, is the most commonly utilized herbicide in agriculture, and it has long been linked to cancer claims. View More

In this articleBAYERCROP-INBAYRYBAYRYFollow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO0:5900:59Supreme Court sides with Bayer bid to limit Roundup weedkiller lawsuitsSquawk on the Street The Supreme Court in a 7-2 decision on Thursday said Bayer cannot be sued over state-level claims that the company failed to warn of cancer risks from its weedkiller Roundup and its chemical glyphosate. The decision is a major win for Bayer and the Trump administration, which argued that failure-to-warn claims were preempted by a federal law that governs pesticides. It's also a major blow to the Make America Healthy Again movement, which helped return Trump to the White House in the 2024 election but has felt betrayed by the administration's embrace of glyphosate — the most commonly used weedkiller in agriculture that has long been linked to cancer claims. Monsanto Co's Roundup is shown for sale in Encinitas, California.Mike Blake | Reuters Justice Brett Kavanaugh wrote for the majority, arguing that because the Environmental Protection Agency deems glyphosate safe when used properly and has not required a cancer warning label, the Federal Insecticide, Fungicide and Rodenticide Act preempts state-level failure to warn claims. "With respect to pesticide labels, FIFRA demands '[u]niformity' and expressly preempts state labeling requirements that are 'in addition to' or 'different from' federal labeling requirements," Kavanaugh wrote. "And as a matter of law, state tort law may not impose labeling requirements 'in addition to' or 'different from' federal requirements imposed under FIFRA." Read more CNBC politics coverageSens. Warren, Kelly press Trump administration on effects of tariffs on manufacturingFive things to watch in Tuesday's primary elections in New York, Maryland, UtahRo Khanna challenges Elon Musk to televised debate after online DOGE battle Bayer celebrated the decision on Thursday, saying it is "good for science, farmers, and industries that depend on regulatory clarity for innovation.""It should help significantly contain the Roundup litigation after nearly a decade of legal battles. The ruling should result in the dismissal of current warning-based claims and bar future failure-to-warn claims," the company, which bought Roundup maker Monsanto in 2018, said in a statement.The company's shares rose 15.75% to $13.09 following the ruling.The case centered on a failure-to-warn claim from one man, John Durnell, who said his cancer was caused by repeated exposure to glyphosate. Durnell was awarded more than $1 million by a Missouri jury in 2019, after the court found Bayer had failed to warn of cancer risks. A Missouri appeals court affirmed the judgment, which the Supreme Court reversed and remanded on Thursday. But the court's decision will likely reach far beyond just Durnell's case, with a torrent of failure-to-warn cases against Bayer over the alleged Roundup cancer risk now in legal jeopardy. MAHA leader and now-Health and Human Services Secretary Robert F. Kennedy Jr. once won a similar case for a man in 2018 who claimed that Monsanto failed to warn of the cancer risk posed by glyphosate.The court's decision could reverberate with political consequences for the Trump administration, as MAHA activists who backed President Donald Trump after Kennedy dropped his independent bid for president and endorsed the now-president. "Today's SCOTUS ruling is historic. Never in history has an administration so blatantly and willingly sold out our fertility, vitality, and health to corporate interests," MAHA advocate Kelly Ryerson wrote on X. She goes by the online moniker "Glyphosate Girl." "It is unforgivable. We will make sure all voters know exactly how this domestic chemical attack happened," Ryerson wrote. The Department of Health and Human Services did not immediately respond to a request for comment from KennedyIn 2015, the World Health Organization's International Agency for Research on Cancer found that glyphosate was "probably carcinogenic to humans." The U.S. EPA has never required such a label. Justice Ketanji Brown Jackson dissented from the court's decision, joined by Justice Neil Gorsuch."In so holding, the Court departs from the near unanimous view of the many state and federal courts that have rejected this preemption argument. In my view, the majority should have joined that chorus," she wrote. "Durnell's failure-to-warn claim is not 'in addition to or different from' FIFRA's mandates; it is equivalent to FIFRA's key labeling requirement — the misbranding prohibition," she wrote.— CNBC's Luke Fountain contributed to this report. watch nowVIDEO6:3706:37Weed killer glyphosate pits Trump against his MAHA basePolitics Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Bond investors are abandoning aggregate benchmarks in favor of a broad mix of fixed-income investments to maximize yield with the stock market on edge. View More

In this article@LCO.1Follow your favorite stocksCREATE FREE ACCOUNT watch nowVIDEO10:0110:01Buy short-dated TIPs if you are worried about inflation, says BlackRock's LaipplyETF Edge Amid recent bouts of stock volatility and a new Fed chair coming into a complex inflation environment, the action in bond ETFs is sending an important signal to the market."Flows tell the story," Steve Laipply, global co-head of iShares fixed-income ETFs at BlackRock, told CNBC's Dominic Chu this week. And that is a story of rising investor interest in yield across the fixed-income market. "In the U.S., bond ETF flows are up a shocking 60% relative to last year," Laipply said.Laipply said a significant share of the flows are going into U.S. treasuries, but there also has been a significant move by investors into multi-sector income ETFs."The income story is very robust and enduring, because rates will continue to move around and 'real yields' are definitely an opportunity," he said, a reference to bond yields net the rate of inflation. "Real yields reflect a growth story," he said, led by the AI boom and the anticipated increase in productivity that is tied to it.Investor interest in multi-sector income funds, according to Laipply, is also an indication of greater emphasis on "income per unit of duration.""The idea of getting a little more duration, but really still focusing on income ... that's sort of the sweet spot," he said."As a bond investor, real yield is your very good friend," George Bory, chief investment strategist of fixed income at Allspring Global Investments, told Chu. How the Fed fits into the fixed-income investment pictureNew Federal Reserve chairman Kevin Warsh has put the market on watch for signs of greater volatility in bonds as he shapes a new approach at the Fed. "The most significant one, at least right now, is about the lack of forward guidance," Bory said. When the Fed telegraphed its every move, managing duration risk was a less active process for investors. Now there will be more of an "uncertainty premium" built into the market, he said.At his first FOMC meeting last week, Warsh was clear about maintaining the Fed's inflation-fighting credentials for the time being, Bory said. "The very front end of the curve is now very steep, as the market is now pricing in multiple rate hikes from the Fed. You don't have to move very far out the curve to start to see a very material increase in yields," Bory said.Laipply said recent declines in what is known as the breakeven inflation rate, which have been falling "very, very sharply" at both the short and long end of the treasuries curve, say to him that "the market is sniffing out something here."The breakeven inflation rate is a measure of the difference between standard treasury yields and treasury- inflation protected securities.Laipply said with "breakevens' where they are, it is not necessarily a bad time for investors still worried about inflation to consider short-dated TIPS. But many bond investors, he said, are "looking past this volatility, and no matter what yields are, they are at a level where income is very attractive relative to what it has been," he said. Stock Chart IconStock chart iconU.S. 10-year treasury bond yield performance in 2026. One of the biggest recent debates in the market among investors is the declining risk premium for holding stocks over bonds.Bory described it as a "pretty attractive" environment for bond investors, but said there are caveats. "We need to be a little careful because credit spreads are very tight," he said, and he added that he thinks those spreads are likely to "stick with us." Tighter credit spreads between various bonds along the traditional risk spectrum are typically a sign of higher investor confidence, but some worry potentially a sign of market complacency."Modest inflation is a meaningful tailwind to credit worthiness and I think we are in bit of a super-cycle for credit more broadly," Bory said. He added that as a fixed-income investor he would be "happy to take the extra income, but won't be too aggressive in going after it."The latest core inflation data from the government was at the highest level since October 2023, but it was in line with market expectations and reinforced the need for the inflation-fighting stance to remain at the Fed.Oil prices are back at their pre-war level as tankers flow through the Strait of Hormuz again, though gas prices are likely to remain elevated, according to Chevron.The labor market complicates the story for investors and the Fed as it attempts to balance its dual mandate of maximum employment and price stability. Laipply said about 90% of recent job creation has been in healthcare, government services, and leisure. "Most of the labor market is soft," he said."The real trick is ... how much weight do you put on that near-term inflation concern versus a softening labor market, or if you want to put it another way, a labor market that's very, very concentrated," Laipply added.Sign up for our weekly newsletter that goes beyond the livestream, offering a closer look at the trends and figures shaping the ETF market. Disclaimer Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The new GMC Sierra trucks are crucial to GM's sales and earnings, especially highly profitable luxury Denali and off-road AT4 models. View More

In this articleGMFollow your favorite stocksCREATE FREE ACCOUNT 2027 GMC Sierra 1500 AT4X (left) and Denali Ultimate modelsCourtesy GMC DETROIT – General Motors revealed its 2027 GMC Sierra 1500 pickup truck lineup on Thursday with new V-8 engine options and redesigned interior and exterior styling.The new GMC trucks are crucial to the automaker's sales and earnings, especially the highly profitable Denali luxury models and off-road AT4 models that represent roughly half of the vehicle's current sales, according to GM. Such models feature unique parts, accessories and amenities to boost pricing and profits for the company.GM said Thursday it's narrowing its model lineup for the next-generation Sierra to the Pro, Elevation, AT4, AT4X, Denali and Denali Ultimate. It's removing the mid-level SLE and SLT trims, which currently start at about $51,500 and $57,900, respectively.GM said pricing details as well as performance specifications will be released closer to when the vehicles go on sale late this year. Starting prices for the current Sierra 1500 lineup ranges from roughly $41,000 for an entry-level Pro to more than $86,000 for a Denali Ultimate. 2027 GMC Sierra 1500 lineupCourtesy GMC "With the next-generation Sierra 1500, we're bringing together a new generation of Small Block V8 power, precise off-road capability, and our most immersive cabin experience to date," said Michael MacPhee, vice president of GM's GMC and Buick brands, in a release. "The next-generation Sierra is the truck all others will be measured against."The new trucks come a week after the Detroit automaker unveiled updates to its Chevrolet Silverado 1500 pickup trucks, which are mechanical siblings to the GMC models.Most noticeably the GMC pickups are styled far differently than their Chevy brethren, including taking styling cues from the brand's all-electric Sierra pickup truck and featuring a new interior.The interior cabin comes with more storage, a sliding center console and a folding table or work surface — all made possible by moving the gear shifter from the center console to behind the steering wheel. It also features new technologies and more than 60 inches of available screens, including an 11.5-inch passenger-side screen that includes media and entertainment functions. 2027 GMC Sierra 1500 Denali Ultimate Courtesy GMC Other significant changes are found under the hood. Like the Silverado models, the GMC pickups will include a new generation of the automaker's small block V-8 gas engines, available in 5.7-liter and 6.6-liter options.In addition to the V-8 engines, the GMC trucks will offer two six-cylinder engines, including a GM-exclusive diesel variant. GM's U.S. sales through the first half of this year are forecast to decline by roughly 7%, according to Cox Automotive. The overall market is expected to see sales fall roughly 3%, Cox said Wednesday. GM reported first-quarter sales were down 9.7% compared with a year earlier, with its GMC brand about level. Sales of the Sierra 1500 were down about 2% to nearly 51,900 units, while larger, heavy-duty models were off about 8% to roughly 24,500 units. Sales of the electric Sierra were up 3%, but remained under 1,300 units.Correction: This article has been updated to correct that in addition to the V-8 engines, the GMC Sierra 1500 trucks will offer two six-cylinder engines, including a GM-exclusive diesel variant. A previous version mischaracterized the options. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

The stern warning underscores Tehran's resolve to retain control over the Strait of Hormuz and to resist transits that bypass its authorization. View More

Oil tankers and cargo vessels remain anchored off Port Sultan Qaboos on June 21, 2026 in Muscat, Oman. Elke Scholiers | Getty Images Iran's Islamic Revolutionary Guard Corps warned shipowners on Wednesday that any new transit route through the Strait of Hormuz established without coordination with Tehran is "unacceptable and dangerous," threatening actions against vessels that ignore its instructions.The stern warning underscores Tehran's resolve to retain control over the Strait of Hormuz and to resist transits that bypass its authorization. It also highlights the lingering uncertainty facing shipowners navigating the Strait even after the U.S. and Iran signed a memorandum of understanding last week to reopen the strategically vital energy artery. The IRGC Navy said that only the shipping routes designated by Iran are permitted for passage, and that coordination with Iranian forces via the designated communication channel is mandatory, according to Iranian local media. "Navigation outside these routes is highly dangerous and prohibited, and we warn all vessels to strictly avoid any movement outside the designated corridors," the IRGC Navy said, according to the report. The warning came after a key naval information group had proposed alternative shipping corridors on Saturday, asking shipowners to consider transiting the strait along the southern route with their transponder signals on. "The southern transit route, along Omani [territorial waters], has been confirmed clear of mines and is the recommended route," the notice said.Traffic data pointed to a tentative recovery. Transits tripled to 93 last weekend compared with the prior comparable period, according to ship-tracking data provider MarineTraffic, but remain far below pre-war levels when more than 100 ships transited the strait each day. MarineTraffic also confirmed 31 verified crossings on Tuesday by commercial and energy-laden vessels, as shipowners continued to use a mix of Iranian, Omani, and International Maritime Organization route patterns through the chokepoint. "Operators are still moving cautiously rather than returning to fully normal traffic patterns," the firm said Thursday. The U.S. Treasury sanctioned Iran's Persian Gulf Strait Authority in May, describing it as an attempt to ​"extort global ​maritime trade." Treasury Secretary Scott Bessent also warned that Washington would not tolerate any tolling system on Hormuz, saying his agency would aggressively target any actors involved. Analysts have warned that any form of Iranian control could have long-term effects on oil flows through the Strait, as transits may not fully recover to pre-war levels if Tehran retains strategic control of the waterway. Oil tanker traffic through Hormuz before the war might represent the high point for transits for the foreseeable future, said Helima Croft, head of global commodity strategy at RBC Capital Markets. "Any end to the conflict that leaves Iran exercising operational control and influence over the Strait will result in appreciably lower flows through the waterway in our view," Croft told clients in a Thursday note.— CNBC's Spencer Kimball contributed to this report. watch nowVIDEO8:0008:00Ambassador Ischinger: U.S. will be “bogged down” by Middle EastSquawk Box Europe Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Carl Jung’s quote teaches that the purpose of human life is to create meaning and purpose. Through self-discovery, growth, relationships, and contribution, people can transform ordinary existence into a fulfilling journey, bringing light, understanding, and value to themselves and others. View More

The personal consumption expenditures price index was expected to show a 4.1% annual increase. View More

watch nowVIDEO5:4505:45Core inflation rate hit 3.4% in May, highest since October 2023, Fed’s preferred gauge showsSquawk Box The Federal Reserve's primary price gauge rose at its highest level since 2023, reinforcing the central bank's recent tough talk on inflation.Excluding food and energy, the personal consumption expenditures price index showed a 3.4% annual rate after rising 0.3% for the month, both in line with the Dow Jones consensus. The annual core reading was the highest since October 2023.For the all-items reading, the PCE index showed inflation running at a seasonally adjusted 4.1% annual rate, the highest since April 2023, according to a Commerce Department report Thursday. On a monthly basis, the PCE accelerated 0.4%. The annual level was in line with the Dow Jones consensus estimate while the monthly reading was 0.1 percentage point below.While Fed officials look at both headline and core rates, they generally consider the latter a better measure of long-run trends, particularly in light of this year's inflation surge that was driven largely by an acceleration in energy prices tied to the Iran war that have slowly been seeping into other parts of the economy.Stock market futures held in positive territory following the release while Treasury yields slipped. Traders continued to expect the Fed to approve a rate hike in September, though they lowered odds slightly.Energy again provided the largest source of price gains, with related goods and services prices up 4% for the month. Housing cost rose 0.3%, while financial services and insurance jumped 1.2%."Inflation is at a 3-year high due to the war in Iran and it's painful for middle-class and moderate-income Americans," said Heather Long, chief economist at Navy Federal Credit Union. "People are spending more on gas, along with healthcare and utilities. New Fed Chair Kevin Warsh has made his commitment clear to bring inflation down. The key will be how much relief happens by September."Even with the elevated inflation levels, consumer spending for the month came in stronger than expected.Personal consumption expenditures, a proxy for spending, rose 0.7% for the month, 0.1 percentage point above the forecast and ahead of the inflation rate. Personal income also climbed 0.7%, well above the 0.4% forecast. The personal saving rate rose to 3%. A shopper looks at a fresh vegetable display June 4, 2026 at the Market 32 Supermarket in South Burlington, Vermont. Robert Nickelsberg | Getty Images The report comes a little more than a week after the Fed and Warsh delivered what markets widely viewed as a tough talk on rates and inflation.Warsh in particular stressed the importance of price stability, with the Federal Open Market Committee adopting language in its post-meeting statement unequivocally stating that it would "deliver price stability" after missing its 2% inflation target for five years running. In addition, officials took off a previously indicated rate cut this year and indicated a likelihood of a hike.However, the inflation picture has been complicated. Fed officials generally look through the kind of supply-driven spike that the energy surge has driven, but concerns are rising that price increases are becoming more widespread and also are being fed by tariffs. Multiple Fed officials dissented at the April meeting because the statement had included "forward guidance" that titled toward further cuts coming, and that language was removed from last week's statement.Other data released Thursday shows the economy in a relatively strong position.Gross domestic product, the broadest measure of growth, rose at a seasonally adjusted annualized pace of 2.1% in the first quarter, according to the last of three readings. That was up from the prior indication of 1.6% and better than the forecast for 1.7%. The Commerce Department said the change largely reflected a downward revision to imports, which subtract from GDP.Also, initial jobless claims fell to 215,000 for the week ended June 20, down 12,000 from the prior reading and better than the estimate for 223,000. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Rheinmetall and other European defense stocks fell for a second day, after Germany scrapped the F126 naval program, raising procurement concerns. View More

In this articleRHM-DEHAG-DER3NK-DER3NK-FFRR.-GBHAG-FFHAG-FFFollow your favorite stocksCREATE FREE ACCOUNT European defense shares extended losses on Thursday, as investors continued to reassess betting on Europe's rearmament boom after Germany scrapped a flagship naval programme.Berlin's U-turn on the F126 program, which could have been worth more than 12 billion euros for which Rheinmetall had been expected to become the lead contractor, is now exposing a key risk to Europe's defense trade. "This news reminds us that [governments] can and do change their minds," JP Morgan analysts led by David Perry said Wednesday.Shares of Rheinmetall fell 1.8% following a 18% drop on Wednesday. German peers Hensoldt and Renk dropped 6.7% and 2.5% respectively, also following losses in the previous session. Stock Chart IconStock chart iconRheinmetall, Henk and Hensoldt shares in the year-to-date. Most of Europe's leading defense companies were in the red on Thursday morning, extending Wednesday's losses. Only Rolls-Royce made gains, rising less than 1%. Why the F126 decision matters for defense stocks The F126 cancellation emphasized to markets that, while defense spending may have driven the sector's rally in recent years, government procurement remains political, unpredictable, and subject to shifting military priorities.Perry noted the major difference between the defence sector and other sectors: the customers are essentially always sovereign governments, whose financial priorities change. "We are absolutely convinced that Germany will spend a lot of money on defence procurement in the next 5+ years and that it will buy significant amount of land vehicles and ammunition from [Rheinmetall]." But the JPMorgan analysts also didn't rule out governments may buy fewer vehicles and ammunition than currently expected because they decide to reallocate money to other areas, such as drones, space, or advanced air defense systems. "The decision to cancel the F126 is a reminder that other assumptions RHM has made for its businesses may prove incorrect," Perry's team added.Germany announced on Wednesday it would instead buy eight smaller Meko A-200 frigates from the German TKMS, instead of the six massive F126 frigates, citing significant project delays, cost increases, and the risks associated with changing the prime contractor to Rheinmetall. Defense stocks plummet on reports Germany is scrapping warships; Rheinmetall stock down 18% The Meko frigates "would be capable of fulfilling the German Navy's core mission of anti-submarine warfare—and, by extension, meeting our NATO obligations," the country's government said in a statement on Wednesday.A year ago, NATO allies agreed to increase defense spending from 2% to 5% of GDP by 2025 after years of pressure from Washington.There has been growing concern among investors that the big budgets, promised by European and G7 countries to keep up with NATO targets, will not materialize, and that companies' growth will be constrained as a result, Morningstar Chief Market Strategist Michael Field told CNBC on Tuesday.In a decade, countries like Germany will still likely be restocking weapons it has given to Ukraine, Field said, adding that "the market is missing" that defense spending doesn't depend on "one war ending or starting."S&P Global Ratings, meanwhile, expects defense budgets to grow unevenly among European nations due to political and fiscal fragmentation. Defense companies will be the immediate beneficiaries, but European economies are unlikely to benefit significantly from higher defense spending, it said in a note on Wednesday. Common procurement and issuance, alongside a preference for European solutions, could provide another boost for companies. The silver lining for Rheinmetall Several equity analysts trimmed revenue expectations and slashed price targets on Rheinmetall. Jefferies analysts cut their price target by 31% to 1,300 euros as they reduced expectations on its 2030 revenue targets, noting that the market cap wiped out by Wednesday's drop – over 10 billion euros – far exceeded the profit value of the contract lost. Tankmaker KNDS lays out IPO plans amid defense selloff in Europe "Restoring confidence will come through more credible targets," they said. "Rheinmetall will face a difficult task to restore the credibility of its communications after this clear blow to its expectations of an imminent F126 order."They did, however, maintain a Buy rating on shares, saying that assumptions have now been derisked.JP Morgan said the silver lining for Rheinmetall is that, ultimately, losing the F126 frigate contract might be a good thing, as building warships is "notoriously difficult." Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

MSCI CEO Henry Fernandez said South Korea's stock market still falls short of developed market standards. View More

In this article.FTSE.KS11SSNLFSSNLFHXSCLHXSCLKRW=Follow your favorite stocksCREATE FREE ACCOUNT People walking through the neon lit night streets of Sinchon in the heart of Seoul, South Korea’s vibrant capital city.Fotovoyager | E+ | Getty Images There is one key issue standing in the way of South Korea obtaining developed-market status, MSCI's CEO said Thursday, after the equity index provider maintained the country's emerging market classification. "South Korea is one of the most developed markets on the planet," Henry Fernandez, CEO of MSCI, told CNBC's "Squawk Box Europe.""Economically, technologically, society-wise, et cetera. [But] our big focus is on the functioning of the equity markets, and in that respect, they exhibit a large number of attributes of emerging markets."South Korea's Kospi index — home to shares of some of the world's leading tech companies, including Samsung and SK Hynix — was the best-performing equity index in the world in 2025, and has surged 112% so far this year. Stock Chart IconStock chart iconKospi index But a key issue holding the country back from a classification upgrade, according to Fernandez — trading restriction imposed on the Korean won. "When you want to buy and sell equities in the U.K., in France, in Germany, in Japan, in the U.S. — any kind of developed market — you've got to buy the currency first to buy the equity, and when you sell the equity, you've got to sell the currency, and you want to do it at your convenience in London, in New York, in Frankfurt, in Tokyo, or somewhere else," he said, before explaining that "you cannot do that in Korea.""The only place you can buy the Korean won is in office hours, day trading hours in Seoul," he said, adding that this makes rebalancing portfolios difficult for index fund managers invested in South Korean equities. A third of the global money being managed on indexes, Fernandez added, is attributable to index funds. While Fernandez noted that reforms to the Korean system are "clearly underway" and "enormous progress" was being made, he said that the problem extends beyond trading hours to questions about liquidity in the currency market. "The doubt that we have, [on] which we need to be convinced, is that every other developed market in the world let the currency trade anywhere," he told CNBC. "If Korea wants to depend on a night shift of trading the won, so that we in London, we in New York can trade it, the question becomes, will that be a large pool of liquidity with a tight bid-ask spread? I have my doubts." MSCI shakes up country classifications Earlier this week, MSCI published a review of its classification system, which South Korea held in the emerging markets category. It disappointed hopes that the country would be put into MSCI's Developed Markets watchlist, a necessary step for any market eyeing an upgrade to developed-market status. MSCI also cited rigid investor identification systems, restrictions on in-kind transfers and off-exchange transactions, and limits on investment products due to restrictions governing the use of exchange data as reasons not to upgrade South Korea. "Investors have communicated that the underlying issues have not been fully resolved," the index provider said.South Korea is preparing to launch 24-hour ‌trading in the dollar-won spot ​market on ​July 6.But MSCI's Fernandez told CNBC on Thursday that "if they make it work — they make many miracles work in Korea — then the question is, at two in the morning, would you want to be selling enough in a very liquid and deep market?""It's hard," he added. watch nowVIDEO10:2510:25Why the AI boom is reshuffling the global stock market hierarchyCNBC Explains Seoul has long sought an upgrade into MSCI's Developed Markets category. It is also classified as a developed market in under the FTSE Equity Country Classification scheme, a categorization overseen by rival index provider FTSE Russell. Earlier this year, the Kospi overtook London's FTSE 100 to become the eighth most valuable national equity index in the world. Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.