News updates from May 28: Israel steps up Rafah offensive; Trump’s lawyers make closing statement

American Airlines on Tuesday said investors would earn less per share this quarter, while announcing the departure of its chief commercial officer.

The company now expects to earn between $1 and $1.15 per share in the second quarter, down from a range of $1.15 to $1.45. Shares fell 8 per cent in extended trade on Tuesday evening.

American said its flying capacity would remain the same as the second quarter of 2023, after previously saying it would grow between 7 and 9 per cent.

The carrier also said chief commercial officer Vasu Raja will leave the company in June. Chief strategy officer Stephen Johnson will take over Raja’s responsibilities “effective immediately”, and begin the search for his replacement.

US stocks closed higher, starting the holiday-shortened week on the front foot.

The Nasdaq Composite ended 0.6 per cent higher on Tuesday to finish above 17,000 points for the first time. Every Magnificent Seven tech group except Tesla finished higher. Nvidia surged 7.1 per cent to close at a record high.

The S&P 500 rose less than 0.1 per cent as strong gains for energy and technology stocks outweighed broad declines in every other sector.

Oil prices rose, with US benchmark West Texas Intermediate rising 2.7 per cent to $79.83 a barrel, its biggest one-day rise since March.

The small-cap focused Russell 2000 slipped 0.1 per cent.

The White House does not support sanctioning the International Criminal Court after its prosecutor sought arrest warrants for Israeli Prime Minister Benjamin Netanyahu and defence minister Yoav Gallant.

“We don’t believe that sanctions against the ICC is the right approach,” National Security Council spokesperson John Kirby said on Tuesday.

US secretary of state Antony Blinken signalled last week the Joe Biden administration was willing to work with Congress on potential ICC sanctions after Republicans called for a censure of the court. Republicans are expected to force a vote on the matter in the House.

Kirby reiterated the White House’s position that the ICC does not have the jurisdiction to seek the warrants and that Washington does not support the court’s move.

The US-built floating pier created to deliver aid to Gaza will take at least a week to be repaired after it was damaged by a storm and rough seas, forcing a suspension of its delivery operations.

The $320mn pier will be removed from its location on the coast of Gaza over the next couple of days and sent to the Israeli city of Ashdod for the US military to repair it, Pentagon spokesperson Sabrina Singh told reporters on Tuesday. it will be re-anchored to the Gazan coast once fixed.

The damage is a significant setback for the US’s seaborne endeavour, which only started getting humanitarian aid to the enclave on May 17.

Singh denied the situation constituted a “failure”, saying more than 1,000 metric tons of aid had been delivered to the people of Gaza.

Donald Trump should not be convicted on the word of “the greatest liar of all time”, his defence team told a New York jury in an attempt to discredit the prosecution’s star witness during closing statements at the first criminal trial against a former president.

The days-long testimony of Michael Cohen, a former Trump acolyte who has become the presumptive Republican nominee’s sworn enemy, is crucial to establishing the prosecution’s case that the former president directed surreptitious payments to buy the silence of a porn actor who alleged an extramarital affair in the lead-up to the 2016 election.

Todd Blanche, a lawyer for Trump, told jurors that Cohen — once Trump’s personal attorney and general purpose “fixer” — had previously lied to federal judges, to Congress, to his family, and to banks, and was therefore the “human embodiment of reasonable doubt”.

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Hess shareholders have approved Chevron’s $53bn takeover, advancing an acquisition at the heart of a high-profile brawl between America’s leading oil companies.

Investors on Tuesday voted to accept Chevron’s offer despite concerns over an arbitration process launched by rival ExxonMobil, which argues it has a right of first refusal over any sale of Hess’s stake in a prize oil find off the coast of Guyana.

John Hess, chief executive of Hess, said: “We are very pleased that the majority of our stockholders recognise the compelling value of this strategic transaction and look forward to the successful completion of our merger with Chevron.”

Hess did not immediately release a tally of shareholder votes at the meeting.

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Additional reporting by Jamie Smyth in Washington

US stocks were mixed overall, despite gains for technology stocks that pushed the Nasdaq Composite past 17,000 points for the first time.

The index rose as high as 17,032.655 in Tuesday afternoon trading — a record intraday high — before slipping below the milestone and trimming overall gains to 0.3 per cent.

Semiconductor group Nvidia was a standout, rising rose 6.8 per cent.

The blue-chip S&P 500 was down 0.2 per cent as about three-quarters of the index’s members traded lower. The healthcare and industrial sectors were the worst performers.

Treasuries sold off, pushing yields higher. The yield on the US 10-year note, was up 0.07 percentage points to 4.54 per cent, while the yield on the two-year note inched up 0.02 percentage points to 4.98 per cent.

The US state department said it did not believe Israel’s operations in Rafah amounted to a full-scale military assault that would cross any red lines set by US President Joe Biden.

Matthew Miller, a state department spokesperson, said the US had expressed its “deep concern” to Israel over a deadly strike in the city in southern Gaza where 1mn people have been sheltering.  

Miller said the US is waiting for the results of the full Israeli investigation into the incident, but noted the Israel Defense Forces’s preliminary conclusions were that the strike hit 1.7km away from the area where civilians were seeking refuge.

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St James’s Place is expected to drop out of the FTSE 100 after shares in the UK’s largest wealth manager fell more than 55 per cent over the past year.

The London Stock Exchange said in its indicative quarterly review on Tuesday that SJP was poised to be demoted from the blue-chip index on June 5, with grocer Ocado, whose shares have fallen about 45 per cent this year, also dropping out and into the FTSE 250.

Cyber security group Darktrace and housebuilder Vistry Group will be promoted from the FTSE 250 to the FTSE 100.

The demotion comes after a bruising 12 months for the Gloucestershire-based wealth manager, which employs one in eight of the UK’s 38,000 financial advisers.

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GameStop shares surged in their first trading session since the company announced it had raised almost $1bn in a stock sale in the wake of a “meme stock” revival.

About a week after announcing plans for a potential raising, the brick-and-mortar video game retailer announced on Friday evening it sold the maximum number of shares registered under the at-the-market programme for proceeds of about $933.4mn.

Shares were up 35 per cent in midday trading in New York on Tuesday, as investors returned from a long weekend.

GameStop shares have been volatile after the trader who was at the centre of the “meme stock” frenzy of 2021, resurfaced on Twitter for the first time in almost three years earlier this month.

The US has announced measures to help small and medium-sized businesses in Cuba, allowing entrepreneurs to open US bank accounts and expand access to financial institutions on the isolated communist island.

“Today we’re taking an important step to support the expansion of free enterprise and the expansion of the entrepreneurial business sector in Cuba,” a senior US official said on Tuesday.

The move comes as part of a broader promise by the Joe Biden administration to ease restrictions on Cuban businesses.

Havana in 2021 relaxed restrictions on the economy, permitting small and medium-sized businesses. Now about 11,000 such firms are in Cuba. Previously, the government only allowed sole traders to operate in the state-planned economy.

Former FTX executive Ryan Salame has been sentenced to 7.5 years in prison, after pleading guilty last year to election fraud charges and to conspiring to operate an unlicensed money transmitting business while working at the cryptocurrency exchange.

Salame, 30, was one of four former high-ranking FTX managers to plead guilty to federal charges after the company’s collapse in late 2022, alongside Caroline Ellison, Nishad Singh and Gary Wang. However, unlike the other three, Salame did not agree to testify for the prosecution at the trial of FTX founder Sam Bankman-Fried.

In March, Bankman-Fried was sentenced to 25 years for stealing billions of dollars from FTX customers and investors in order to make risky bets.

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The European Commission said it “deeply regrets” the Georgian parliament’s decision to pass a controversial foreign influence law, stating that is in breach of EU “principles” required for the country to progress on its membership path. 

“The EU has stressed repeatedly that the law adopted by the Georgian Parliament goes against EU core principles and values. Its enactment . . . will negatively impact Georgia’s EU path,” the EU commission said.

“The EU and its member states are considering all options to react to these developments,” it added.

Several EU countries last week pushed for sanctions against Georgia over the Russian-inspired “foreign agents” law.

European stocks slipped and US tech companies rallied on Tuesday during a quiet session of trading.

Europe’s region-wide Stoxx 600 closed 0.6 per cent lower, with every sector bar real estate in negative territory. France’s Cac 40 slipped 0.9 per cent and Germany’s Dax lost 0.5 per cent. London’s FTSE 100 fell 0.7 per cent, dragged lower by declines for gambling groups Flutter and Entain.

In the US, Wall Street’s S&P 500 was flat and the tech-dominated Nasdaq Composite added 0.5 per cent in morning trading. Chipmaker Nvidia was the best performing S&P 500 company, up 5.4 per cent.

The Georgian parliament has adopted a controversial “foreign agents” law despite months of street protests and warnings from Brussels that it could endanger the country’s EU accession drive.

The bill, which is expected to enter into force next month, mandates that civil rights groups and media outlets receiving funds from abroad must register with the government as “foreign agents” or face fines. Critics have said the law was inspired by Vladimir Putin’s crackdown on non-governmental organisations and independent media.

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Scott Sheffield, the former boss of Pioneer Natural Resources, has lashed out at the Federal Trade Commission, saying the US regulator “unjustly smeared” and “vilified” him by alleging he had sought to collude with Opec to restrict oil production.

Pioneer, the biggest oil producer in Texas, was acquired by ExxonMobil in a $60bn deal that closed this month. But in greenlighting the transaction, the FTC took the unusual step of banning Sheffield from serving on the supermajor’s board, arguing it would give him a platform to engage “in collusive activity”.

“In straining to find a reason to criticise the merger of Exxon and Pioneer, the FTC stepped well beyond its proper mandate and unjustly smeared Mr. Sheffield,” lawyers for Sheffield wrote in a filing on Tuesday demanding the regulator withdraw its complaint.

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The co-owner of Mercuria, one of the world’s largest commodities traders, will give at least a half of his $1.5bn wealth to charitable causes by joining a campaign that encourages extremely wealthy individuals to donate their money to philanthropic causes.

Marco Dunand and his wife have joined the Giving Pledge, a campaign set up in 2010 by Bill Gates, Melinda French Gates and Warren Buffett, the campaign said on Tuesday.

Other new members in the past year include Sam Altman, chief executive of OpenAI, and Jahm Najafi, the Iranian-American private equity mogul who was looking to take over the Premier League club Tottenham Hotspur last year.

Donald Trump had “absolutely no intent to defraud” American voters in the 2016 election by surreptitiously paying off a porn actor who alleged an extramarital affair, his defence team argued as closing statements began in the first ever criminal trial against a former president.

“President Trump . . . did not commit any crimes and the district attorney has not met their burden of proof. Period,” Todd Blanche told jurors in the Manhattan courtroom on Tuesday. He added that the “hush money” case was “about documents” and “not about an encounter with Stormy Daniels 18 years ago”, which Trump has consistently denied. 

Read more here.

US consumer confidence picked up in May after falling for three months in a row, as more Americans felt optimistic about future economic conditions thanks to the continued strength of the labour market. 

The Conference Board’s consumer confidence index rose to a reading of 102 this month, up from a revised figure of 97.5 in April, the organisation said. 

Despite the rosier outlook, inflation expectations for the next 12 months ticked up to 5.4 per cent from 5.3 per cent in April, while the perceived likelihood of a recession over the coming year also rose in May. 

Price growth, particularly for groceries, remains the top concern for consumers, said Dana Peterson, chief economist at The Conference Board.

The former boss of the Dutch intelligence service is the likely next prime minister of the Netherlands.

Dick Schoof, a civil servant who runs the justice ministry, has been nominated by far-right election winner Geert Wilders.

Wilders’ Freedom party reached a deal to form a government in coalition with three other parties earlier in May, six months after the Dutch parliamentary elections, but have yet to agree on a premier.

Vladimir Putin has warned that giving Ukraine permission to strike targets inside Russia with advanced western weaponry could escalate the two-year war and lead to “serious consequences”.

Putin, Russia’s president, on Tuesday said Nato members, particularly in Europe, supplying Ukraine with advanced weapons should “admit to themselves what they’re playing at” and hinted Moscow could strike back in response.

“They should remember that, as a rule, these are small, very densely populated countries,” Putin said after a state visit to Uzbekistan, according to Interfax. “This is the factor they should keep in mind before talking about striking Russian territory.”

US pipeline group Energy Transfer has agreed to acquire WTG Midstream in a $3.25bn deal as it seeks to bolster its footprint in the prolific Permian Basin oilfield of Texas and New Mexico.

The deal marks the latest in an mergers & acquisition spree in US oil and gas that has spread from upstream producers to the midstream groups responsible for piping hydrocarbons around the country.

It comes a week after Energy Transfer chair Kelcy Warren, a prominent supporter of Donald Trump, hosted a fundraising lunch for the former president in Houston attended by a number of wealthy industry donors. 

Absorbing WTG will add more than 6,000 miles of natural gas pipelines to Energy Transfer’s network in the Permian, where the ability to ship gas to market is constrained.

US stocks rose early on Tuesday as traders looked ahead to inflation data due on Friday.

Wall Street’s S&P 500 added 0.1 per cent in early trading in New York. The tech-dominated Nasdaq Composite rose 0.5 per cent.

On Friday, the Federal Reserve’s preferred measure of inflation is expected to show that prices in April rose at 2.7 per cent year-on-year, the same pace as March.

Changes to US market plumbing that came into effect on Tuesday, which aim to reduce settlement risk, mean buyers and sellers of financial securities will have one day rather than two to finalise trades. 

US home prices increased in March as lean housing inventory continues to underpin demand in the high-mortgage rate environment.

The S&P Corelogic Case-Shiller index of prices covering 20 major US cities rose 0.3 per cent in March on a seasonally-adjusted basis from the previous month. That matched economists’ expectations but was a slower pace than February’s 0.6 per cent gain.

For the year to March, prices increased 7.4 per cent, an acceleration from February’s 7.3 per cent pace, and the fastest annual increase since October 2022.

Although high mortgage rates have deterred some buyers, lean housing inventory continues to support demand, particularly in large metropolitan markets like New York and San Diego.

T-Mobile US has agreed to buy most of US Cellular’s wireless operations in a deal that will result in millions of wireless customers changing hands and continuing a wave of consolidation within the telecoms industry.

The $4.4bn deal, which includes up to $2bn of debt, will give T-Mobile about 4mn US Cellular customers as well as some spectrum assets for transferring data wirelessly, the companies announced on Tuesday. The agreement will not include US Cellular’s towers.

Chicago-based US Cellular, which has a market capitalisation of about $3.7bn, has struggled to prevent its mostly rural customer base from switching to other carriers. The deal is expected to close in mid-2025.

Shares in US Cellular were up about 11 per cent in pre-market trading, while those in T-Mobile US were down 0.3 per cent.

The EU executive has approved €2.4bn in state subsidies to fund investments in the hydrogen and health sectors, the European Commission said on Tuesday.

The move is part of a string of European state subsidies designed to boost the bloc’s competitiveness.

Six member states, including Hungary, Italy and France, will give funding of €1bn to help the discovery of drugs to treat rare diseases and cancers. The move will unlock an extra €5.9bn in private funding, according to EU estimates.

The hydrogen project is designed to help the bloc reach its target of a 90 per cent reduction of emissions from the mobility and transport sectors, the EU executive said.

Big share price moves in Europe today include UK asset manager Intermediate Capital Group, London-listed pharmaceutical company AstraZeneca and London-listed bathroom retailer Victorian Plumbing Group: 

• Intermediate Capital Group: Shares in the UK-based global alternative asset manager rose 2.4 per cent after it booked full-year profit before tax of £375mn on its fund management activities, up 21 per cent compared with 2023, and record management fees of £505mn. 
  

  

• AstraZeneca: Shares in the London-listed pharmaceutical company shed about 1 per cent after the company reported that the phase 3 trial of a lung cancer treatment being jointly developed with Daiichi Sankyo showed improvement in overall survival compared with conventional treatment, but was not statistically significant. 

• Victorian Plumbing Group: Shares in the London-listed bathroom reversed an early fall to rise 0.4 per cent after the company reported that revenue in the six months to March fell 1 per cent to £144.6mn. 

OpenAI has announced that it is training its next generation of AI models, the follow-up to its state-of-the-art GPT-4 software which powers ChatGPT.

The San Francisco-based company said on Tuesday that it anticipated the “resulting systems to bring us to the next level of capabilities”, although it did not say what these capabilities might be.

The leading AI company also launched a new safety and security committee, tasked with evaluating OpenAI’s processes and safeguards over the next 90 days. The committee will be led by chief executive Sam Altman and board directors Bret Taylor, Adam D’Angelo and Nicole Seligman, who will report back to the remaining three members of the board.

European stocks slipped early on Tuesday as investors looked ahead to crucial inflation data out later this week.

The region-wide Stoxx 600 fell 0.03 per cent, with healthcare stocks and consumer non-cyclicals among the worst performing groups. France’s Cac 40 lost 0.2 per cent, Germany’s Dax rose 0.2 per cent and London’s FTSE 100 fell 0.07 per cent.

Eurozone inflation figures are out on Thursday. Prices are expected to be 2.5 per cent higher in May than they were a year ago, a slight acceleration from the 2.4 per cent rate a month earlier.

Investors are betting that the European Central Bank will cut its benchmark deposit rate when it meets on June 6.

UK equity fund manager Nick Train has apologised for the performance of his flagship investment trust Finsbury Growth and Income over the past few years and blamed the lack of exposure to technology companies.

Shares in the trust have returned 2.7 per cent over the six months to the end of March, compared with the FTSE All-Share index’s 6.9 per cent, according to its half-year results on Tuesday.

“We really should be able to do better than this and if we can’t, then I absolutely share shareholders’ growing impatience,” Train said.

“The portfolio did not, with the benefit of hindsight, have enough exposure to . . . technology or companies well-positioned to exploit technology,” he added. “It had some, but evidently not enough.”

Mainland Chinese equities underperformed the rest of Asia during trading on Tuesday afternoon, with real estate companies dragging down the country’s benchmark index.

The CSI 300 dropped 0.7 per cent as shares in the property sector sold off, shedding 2 per cent. Hong Kong equities reversed their morning gains, with the Hang Seng down 0.2 per cent, also led lower by mainland Chinese companies, while Hong Kong’s property sub-index dropped 1.8 per cent.

Chinese property developers saw their shares rally in recent weeks after Beijing announced a real estate support package, but have subsequently sold off amid concerns the measures will not be enough to help the stricken sector.

ABN Amro is buying German private lender Hauck Aufhäuser Lampe for €672mn in cash from Chinese conglomerate Fosun, as the Dutch bank doubles down on wealth management in Europe’s largest economy.

The Frankfurt-based private bank has been owned by Fosun since 2016 and manages €26bn in assets on behalf of entrepreneurs and rich families. The transaction will turn ABN Amro into the country’s third-largest wealth manager, ABN said in a statement on Tuesday. 

HAL, which generated €83mn in net profit in 2023, has been valued at its book value in the transaction. The transaction is expected to be closed in the first quarter of 2025.  

Stock markets in Asia were muted during early trading on Tuesday, with Hong Kong’s benchmark Hang Seng index leading the region with a 0.8 per cent increase.

Gains in Hong Kong’s stock market were concentrated in Chinese technology names, with the Hang Seng Tech index rising 1.3 per cent.

South Korea’s Kospi index was flat despite the government announcing it was preparing to release details of tax incentives that are part of a campaign to boost stock market valuations in the country.

Australia’s benchmark S&P/ASX 200 index shed 0.2 per cent after official data showed weak retail sales growth in April.

Papua New Guinea and international relief workers are struggling to rescue victims of a landslide in the South Pacific nation’s remote interior.

The UN’s migration agency, which works in the region, told the Financial Times on Tuesday that 1,575 people from 315 households had been displaced by the landslide near Mulitaka in mountainous Enga province.

The remote area has long been known for inter-tribal conflict, which has hampered rescue efforts.

Serhan Aktoprak, country head of the UN’s International Organization for Migration, noted that the PNG government has said nearly 8,000 people had been displaced. “We are trying to understand the breakdown of their figures,” he said.

On Sunday, IOM estimated the landslide death toll at 670.

The cabinet chief to Argentina’s President Javier Milei is leaving the administration in the first high-level departure from the libertarian leader’s government.

Nicolás Posse, whom Milei met almost two decades ago in the private sector, was one of his closest advisers, and cabinet chief is one of the most powerful roles in Argentine governments.

His departure comes days after the government missed a self-imposed May deadline to approve two economic reform bills in the senate.

Interior minister Guillermo Francos will replace Posse as cabinet chief. The president’s office said Francos would bring “a greater political volume” to the role in a statement on Posse’s resignation.

The Philippines is pressing the US and its allies to boost trade and investment in the country as escalating tensions between Manila and Beijing spark fears of a wider economic fallout.

Economic security should become central to the strategic relationships that the Philippines is building with its allies, said Alfredo Pascual, trade and industry secretary, in an interview with the Financial Times. “It is significant because if we are economically secure, we could also afford to strengthen our defence capabilities.

If you are not economically secure, you cannot divert or utilise resources for defence,” he said. “We need to have credibility in our defence posture.”

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Events: The secretary-general of the OECD visits Jakarta to discuss steps for Indonesia joining the 38-nation club. Semicon Southeast Asia, a trade show for the electronics industry, returns to Kuala Lumpur.

Economic indicators: Australia publishes retail sales data for April and Japan releases its core consumer price index figures for May.

Central banks: Sri Lanka’s central bank announces its interest rate decision.

Corporate updates: Malaysian communications conglomerate CelcomDigi and Indian Railway Catering and Tourism Corporation report quarterly earnings.