News updates from May 31: Biden says Israel has offered new ceasefire proposal; S&P downgrades France’s credit rating

France’s credit rating has been downgraded by S&P Global in a blow to President Emmanuel Macron’s credibility as a steward of the economy, once the bright spot of his presidency.

The rating agency changed France’s long-term issuer rating to double A minus with an stable outlook, from double A previously, citing concerns that the trajectory of government debt as a share of GDP would increase through 2027, and not decrease as previously forecast. 

S&P also said France’s lower than expected growth factored into the downgrade, and expressed concern that “political fragmentation” would make it difficult for Macron’s government to enact reforms to boost growth or “address budgetary imbalances”.

The downgrade, the most significant for France since the aftermath of the eurozone crisis roughly a decade ago, risks having significant political fallout for Macron, but the financial impact is likely to be limited. 

Israeli Prime Minister Benjamin Netanyahu has been officially invited to address US congress.

The bipartisan invitation had been in the works for several weeks, though no date has been set for the potential speech from the Israeli leader.

Republican House Speaker Mike Johnson and Democratic senate majority leader Chuck Schumer, as well as Mitch McConnell and Hakeem Jeffries, the Republican and Democratic leaders, respectively, of the lower house, signed the letter.

“To build on our enduring relationship and to highlight America’s solidarity with Israel, we invite you to share the Israeli government’s vision for defending democracy, combatting terror, and establishing a just and lasting peace in the region,” the leaders wrote in the letter, which was dated May 31.

A special committee of Paramount directors has recommended a sweetened acquisition offer from Skydance Media, people briefed on the matter said, leaving the final decision over whether to sell the storied Hollywood company in the hands of controlling shareholder Shari Redstone. 

The future of Paramount has been in flux for the past several months. Redstone has been negotiating with Skydance, the production group founded by billionaire David Ellison, over a complex deal to offload the company.

Skydance has offered to decrease the payout to Redstone’s National Amusements in favour of a bigger payout for the rest of Paramount’s investors, the people said. The move is aimed at winning over common shareholders, some of whom previously protested that the Skydance offer favoured the Redstone family. 

A special committee representing shareholder interests, tasked with making a recommendation to the board, has approved the Skydance deal, according to two people familiar with the matter.

A late surge in equities helped the S&P 500 swing into the black and avoid chalking up its first three-day winning streak since mid-April.

Wall Street’s benchmark index finished 0.8 per cent higher as all sectors advanced, with the energy sector the top performer. The Nasdaq Composite ended about flat as four Magnificent Seven stocks made gains late in the session to finish higher.

The indices still notched their first weekly losses since the week ended April 19. The S&P 500 fell 0.5 per cent in the holiday-shortened week, while the Nasdaq Composite declined 1.1 per cent across four sessions.

US stocks were on course for the first three-day losing streak and their first — and biggest — weekly drop since mid-April as shares in tech groups endured a recent bout of weakness.

S&P 500 was down 0.3 per cent in Friday afternoon trading, despite two-thirds of stocks in the Wall Street benchmark trading higher. Heavyweight groups in the technology and consumer cyclical sectors did the damage.

The tech-heavy Nasdaq Composite was down 1.3 per cent. Amazon fell 2.7 per cent, making it the biggest loser in the Magnificent Seven, while in the broader tech sector, Dell Technologies shares plunged after warning on the impact artificial intelligence investment would have on its margins.

US Treasuries remained supported, but relatively steady, after US inflation data earlier in the day aligned with consensus expectations.

The yield on the 10-year note was down 0.04 percentage points at 4.51 per cent, while the yield on the two-year note decreased 0.04 percentage points to 4.89 per cent.

US President Joe Biden urged Israel and Hamas to accept a newly proposed deal aimed at freeing hostages and a lasting ceasefire between the two sides.

Biden acknowledged, though, there could be opposition in Israel to its new proposal.

“I know there are those in Israel who will not agree with this plan and will call for the war to continue indefinitely. Some are even in the government coalition,” Biden said during a press conference at the White House on Friday.

“Well, I urge leadership in Israel to stand behind this deal despite whatever pressure comes,” he said. Biden also called for Hamas to accept it.

“Hamas says it wants a ceasefire. This deal is an opportunity to prove whether they really mean it. Hamas needs to take the deal,” Biden said.

US President Joe Biden said the rule of law in America had been “reaffirmed” after Donald Trump’s conviction by a New York Court, as he criticised the former president and his allies for attacking the US justice system. 

“The American principle that no one is above the law was reaffirmed. Donald Trump was given every opportunity to defend himself,” Biden said, speaking from the White House on Friday. 

“It’s reckless, it’s dangerous. It’s irresponsible for anyone to say this was rigged, just because they don’t like the verdict.”

Shares in Dell Technologies were on track for a record one-day drop — and were fuelling a broader sell-off in US stocks — as investors punished the tech group for weak results and its warning that investments in artificial intelligence would eat into margins.

Dell shares were down 21.5 per cent in lunchtime trading on Friday, on course to be the stock’s biggest drop since the company returned to the public market in 2018. The Nasdaq Composite was down 1.3 per cent.

“Given inflationary input cost, the competitive environment and a higher mix of AI-optimised servers, we do expect our gross margin rate to decline roughly 150 basis points,” Dell chief financial officer Yvonne McGill told analysts after the company reported weaker than expected results.

The head of the UK’s Payments Systems Regulator is set to leave the watchdog after four years, as the institution faces growing criticism from industry and government on its tackling of fraud.

Chris Hemsley, who was appointed managing director of the PSR in 2019, a year after he joined the regulator as head of policy and strategy, is expected to announce his departure in the coming weeks, according to sources familiar with the matter.

The PSR was created in 2015 as one of the world’s only dedicated payments regulators. The watchdog has in recent weeks faced a backlash from the industry and government about its fraud reimbursement rules that are due to come into force in October.

European stocks closed higher, overcoming slightly higher than expected Eurozone inflation figures that failed to shake investors’ conviction that interest rates will fall when the region’s central bank meets next week.

The region-wide Stoxx 600 closed 0.3 per cent higher on Friday, leaving it 8.1 per cent higher since the start of the year. France’s Cac 40 rose 0.2 per cent and Germany’s Dax was steady. London’s FTSE 100 added 0.5 per cent.

In currency markets, the euro strengthened 0.1 per cent against the dollar to $1.0843.

Moderna has received its second drug approval from US regulators for an RSV vaccine in older adults, a step forward in the biotech’s efforts to convince investors of its path back to growth after the Covid-19 pandemic. 

The vaccine was approved by the US Food and Drug Administration to protect adults aged 60 and over from complications such as lower respiratory tract disease and pneumonia resulting from respiratory syncytial virus, Moderna said on Friday. 

The FDA decision hands Moderna its second-only product approval to date after its Covid jab, which has generated more than $40bn in revenue. Its blockbuster Covid shot propelled the Boston-based biotech to a valuation of more than $160bn at the height of the pandemic, but investors have since soured on the vaccine maker, with the stock down 65 per cent from its peak.

Donald Trump ended his press conference by touting his campaign fundraising in the past month, and encouraged people to vote in the election.

“We’re going to Make America Great Again, we’re going to make it greater than before. November 5th, remember, November 5th is the most important day in the history of our country.”

He left the podium in Trump Tower atrium to cheers from the crowd, and did not take any questions.

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Donald Trump said his campaign raised $39mn — and had become even more popular — after a Manhattan jury found him guilty on all counts in the “hush money” trial.

Highlighting “small money donors” in particular, Trump said on Friday the campaign raised “a record $39mn in about a 10-hour period” following the guilty verdict.

“I like those people,” he said as the crowd assembled in the Trump Tower atrium applauded.

“So far . . . I guess it’s backfired,” he said, probably in reference to predictions his popularity and fundraising ability would be immediately harmed by a guilty verdict.

Donald Trump said he will appeal against the guilty verdict against him in the “hush money” trial and maintained his innocence.

“There was nothing illegal” about the payments, he said on Friday during his press conference.

“We’re going to be appealing this,” Trump said. “The money that was paid was legal. There was nothing illegal.”

He said he never thought of his former lawyer - who he could not name as a result of the gag order - as a “fixer”.

Donald Trump said what happened to him “can’t be allowed to happen to other presidents” but that had he had become more popular after the guilty verdict.

He cited a poll from UK newspaper The Daily Mail, suggesting that voters still support him after Thursday’s decision by the Manhattan jury in the “hush money” trial.

“I’m up six points,” he said, referring to a favourability poll of 403 people that said Trump’s popularity rose after the guilty verdict.

“The public understands what’s going on. This is a scam, this is a rigged trial, it shouldn’t have been in that venue, we shouldn’t have had that judge.”

Donald Trump criticised Alvin Bragg, the Manhattan district attorney who brought the hush money case against the former president.

Trump said Bragg did not even want to bring the case until he announced he would run in the 2024 presidential election.

“We have a DA, a failed DA, crime is rampant in New York, violent crime, that’s what he’s really supposed to be looking at . . . and Bragg is down watching a trial on what they call crimes,” Trump said at his press conference on Friday.

“Nobody wanted to bring the case,” Trump continued. “When Bragg came in he said this is the most ridiculous case I’ve ever seen . . . Then when I announced I was running for president, a long time later, they decided to revive this case.”

Trump said he wanted to testify, and didn’t care about the risk of perjury.

Trump criticised a gag order against him, which limits what he can say about jurors and witnesses involved in the case, and implied that the prosecutors were colluding with the White House.

“I am under a gag order by a man who can’t put two sentences together, given by a court, and they are in total conjunction with the White House and the DOJ, just so you understand, this is all done by Biden and his people.”

He added: “I have had to pay thousands of dollars of penalty and fines and was threatened with jail . . . Think about it I’m the leading candidate . . . No presidential candidate has ever been under a gag order.”

Donald Trump said the “hush money” trial at which he was found guilty was “very unfair” and was all “done by Biden and his people”.

“The trial itself was very unfair,” Trump said at a press conference on Friday. “This is all done by Biden and his people.”

Trump also criticised the gag order and the judge who he says is “highly conflicted”.

Donald Trump started his press conference by criticising people involved in prosecuting his case.

“This is a case where if they can do this to me, they can do this to anyone. These are bad people, these are, in many cases I believe, sick people,” he told supporters at Trump Tower on Friday.

Vermont has become the first US state to pass a law ordering fossil fuel companies to pay a share of the damages caused by climate change.

Under the legislation the Vermont state treasurer would provide a report by January 2026 outlining the total cost of greenhouse gas emissions over roughly the last two decades to Vermont residents.

The assessment, which would be carried out along with the state’s agency for natural resources, would look at the effects on public health, natural resources, agriculture, economic development and housing. 

Republican governor of Vermont Phil Scott allowed the bill to become law without signing it, warning that “taking on ‘Big Oil’ should not be taken lightly”.

Chilean state-owned copper producer Codelco is set to enter the lithium industry after finalising an agreement with lithium miner SQM as Santiago moves a step closer to fulfilling its mandate of taking greater control over production of the key electric car battery metal.

The deal, in which Codelco will take a majority stake in a joint venture with the world’s second largest lithium producer, will hand the government 70 per cent of the operating margin from a key production site in the country from 2025 to 2030, rising to 85 per cent from 2031.

The deal has, however, stirred controversy with SQM’s second-largest shareholder Tianqi Lithium, which faces dilution and waning influence in its lithium operations and has requested the Chilean securities regulator for SQM to put the deal to a shareholder vote.

US stocks rose early on Friday after the Federal Reserve’s preferred measure of inflation landed in line with expectations.

Wall Street’s benchmark S&P 500 added 0.2 per cent, as did the tech-dominated Nasdaq Composite. Interest rate-sensitive real estate stocks were the best performers in early trading in New York.

A measure of the dollar’s strength against a basket of six other currencies fell 0.25 per cent.

Yields on benchmark 10-year Treasuries fell 0.05 percentage points to 4.5 per cent. Yields move inversely to prices. 

Members club Soho House has rejected an option to take the company private, a move considered by the company after a short-seller report in February criticised what it called its “broken business model”.

On Friday the New York-listed group revealed a potential buyer had previously made an offer for the business, which the board’s special committee — established to evaluate various strategic options, including delisting, and which has now been dissolved — concluded “did not adequately reflect the value of the company and was not in the best interests of its public stockholders”, Soho House said in a statement. It did not disclose which company had made the offer.

The take-private option emerged days after New York-based short-seller GlassHouse published research criticising Soho House, saying it has “a broken business model and terrible accounting”.

The US will continue to adapt its policies on the use of its weapons by Ukraine in the war against Russia, secretary of state Antony Blinken said on Friday.

Blinken spoke hours after officials said the US had eased restrictions on Ukraine’s use of US weapons to hit Russian military targets attacking Kharkiv.

“Over the past few weeks Ukraine came to us and asked for permission . . . that went right to the president. And as you heard, he has approved the use of our weapons for that purpose,” Blinken told reporters.

“Going forward we will continue to do what we have been doing, which is to do what is necessary and adapt and adjust,” he added.

Shares in Donald Trump’s social media company were trading higher in pre-market trading, continuing a bout of volatility that hit the stock after the former president was on Thursday found guilty on all counts in the “hush money” trial.

Trump Media & Technology Group shares were up almost 4 per cent ahead of Wall Street’s opening bell on Friday, putting them around their highest level since early May.

On Thursday afternoon, the stock fell as much as 15 per cent from its regular closing level of $51.84 as news of Trump’s guilty verdict broke.

US stock futures edged higher after the Fed’s preferred measure of inflation landed in line with economists’ forecasts.

Futures contracts tracking Wall Street’s S&P 500 share gauge added 0.3 per cent, while those tracking the technology-heavy Nasdaq 100 index rose 0.2 per cent.

In government bond markets, the policy-sensitive two-year Treasury yield slipped 0.02 percentage points lower to 4.91 per cent, while the benchmark 10-year yield fell 0.04 percentage points to 4.51 per cent. Bond yields fall as prices rise.

US inflation held at 2.7 per cent in the year to April, according to the metric the Federal Reserve uses to set its target for price pressures.

Friday’s data on personal consumption expenditures was in line with economists’ expectations that inflation would remain the same as in March.

The Fed’s target for headline PCE is 2 per cent.

Core PCE, which ignores changes in food and fuel prices, was 2.8 per cent, in line with expectations.

Fed officials’ next rate-setting vote is on June 12. They are expected to say that they need more data on inflation before lowering borrowing costs from their current 23-year high of 5.25 to 5.5 per cent.

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India’s economy registered better than expected growth of 7.8 per cent in the three months to March compared with the same quarter last year, the final reading before the end of the country’s multi-week election.

The rate was slower than the previous quarter’s 8.4 per cent but much faster than the 6.7 per cent predicted by economists in a Reuters poll.

Growth in the year to March was 8.2 per cent, cementing India’s place as the world’s fastest-growing major country. 

The figures came in shortly before voting ends on Saturday, in an election seen as a referendum on Prime Minister Narendra Modi’s decade-long rule.

Ukraine has the right to strike back against Russia with weapons being provided by Nato allies, the secretary-general of the western military alliance has said.

The US and Germany have signalled they will permit Kyiv to use their weapons to hit targets in Russia that are being used to attack Ukraine, in a shift in long-standing policy. Russia has condemned that move.

Jens Stoltenberg welcomed allies “easing restrictions on the use of weapons”, he told reporters after a meeting of Nato foreign ministers in Prague on Friday. “Ukraine is defending itself from appalling Russian brutality. So let me be clear: self-defence is not escalation.”

He added: “As the war has evolved, our support has evolved. And it will continue to evolve.”

Inflation: Economists anticipate that the core personal consumption expenditures index, an inflation measure closely watched by the Federal Reserve, remained unchanged in April at 2.8 per cent on an annual basis. The same PCE report is forecast to show personal consumption moderated to a 0.3 per cent gain on a monthly basis compared with an 0.8 per cent rise in March.

Donald Trump: The former US president will hold a press conference at 11am Eastern time, a day after the verdict in which he was found guilty on all counts in the “hush money” trial.

Germany has followed the US in granting Ukraine permission to attack military targets on Russian territory using German weapons.

Steffen Hebestreit, spokesperson for Chancellor Olaf Scholz, said Russia had recently been launching “co-ordinated attacks” on areas around Kharkiv “from positions in the immediately adjacent Russian border region”.

He said western leaders were convinced Ukraine had the right under international law to defend itself against these attacks. “It can also deploy weapons that have been supplied [by the west], in compliance with its international legal obligations, to do that, including weapons that we have supplied,” he said.

Weapons supplied by Germany that might be used for such attacks include the Panzerhaubitze 2000 and Mars II rocket launcher.

European bond yields rose after consumer prices in the single-currency bloc rose 2.6 per cent in May from a year ago, a slight acceleration from 2.4 per cent in April and above economists’ forecasts of 2.5 per cent.

Germany’s 10-year yield was 0.04 percentage points higher at 2.69 per cent. Yields move inversely to prices. Markets remain overwhelmingly confident that rates will fall by a quarter percentage point.

The region-wide Stoxx 600 stood 0.1 per cent lower following the data release. 

In currency markets, the euro was steady against the dollar at $1.0839.

Eurozone inflation rose for the first time this year, adding to worries about how slowly the European Central Bank will cut interest rates if price pressures remain high.

The 2.6 per cent rise in the year to May was up from 2.4 per cent the previous month and slightly above the level forecast by economists in a Reuters poll.

Core inflation — which strips out energy and food to give an idea of underlying price pressures — accelerated from 2.7 per cent to 2.9 per cent.

The ECB is still widely expected to go ahead with next week’s rate cut, which would make it the first major central bank to ease monetary policy since the biggest inflation surge for a generation started three years ago. 

Activity in the UK housing market remained steady in April, according to Bank of England data that adds to evidence of resilient consumer confidence.

The central bank said on Friday that net mortgage approvals for house purchases were 61,100 in April, little changed from the previous month. Meanwhile net mortgage lending of £2.4bn was 0.2 per cent higher than a year earlier — the fastest annual growth since October 2022, coming after a 0.1 per cent contraction in March.

The BoE said the “effective” interest rate — the actual interest rate paid — on newly drawn mortgages increased by only 1 basis point to 4.74 per cent in April.

Big share price moves in Europe today include London-listed gambling group Flutter, Swedish aeronautics company Saab and UK sportswear retailer JD Sports:

• Flutter: The London listed gambling group was the biggest faller on the Europe-wide Stoxx 600 index, with the shares shedding 12.6 per cent after it announced its finance chief Paul Edgecliffe-Johnson was stepping down with immediate effect.
  

  

• Saab: Shares in the Swedish aeronautics and defence company rose 3.7 per cent after it announced it had received a “large order” from a western country for its defence systems and equipment, worth approximately SKr7.7bn ($728mn) to be delivered in 2027-28.

• JD Sports: Shares in the UK sports fashion retailer dropped 8.3 per cent in early trading after it posted a 7.5 per cent fall in annual pre-tax profits before adjusting items to £917.2mn, following a January profit warning.

European stocks were steady ahead of the release of inflation data on Friday that is expected to give the region’s central bank the all-clear to begin cutting interest rates when it meets next week.

The region-wide Stoxx 600 added less than 0.1 per cent in early trading. France’s Cac 40 rose 0.1 per cent and Germany’s Dax fell 0.1 per cent. London’s FTSE 100 added 0.1 per cent.

Consumer prices in the single-currency bloc are forecast to be 2.5 per cent higher in May than they were a year ago, a slight acceleration from 2.4 per cent in April. 

Traders are nonetheless confident that the European Central Bank will cut its benchmark deposit rate by a quarter percentage point from 4 per cent when it meets on June 6.

French inflation accelerated for the first time this year, adding to doubts about whether Eurozone price pressures will remain high and interest rates will be cut only slowly this year.

Consumer prices in the Eurozone’s second-largest economy rose 2.7 per cent in the year to May, up from 2.4 per cent in April, according to figures from the national statistics agency on Friday. Economists polled by Reuters had expected a reading of 2.5 per cent.

There is expected to be a similar pick-up in consumer price growth across the overall Eurozone to 2.5 per cent when that data is released later on Friday.

The European Central Bank is expected to start cutting its benchmark deposit rate from its record high of 4 per cent next week.

The UK government has cut its stake in NatWest to under 23 per cent as it speeds up its exit from the high-street bank, after the upcoming general election forced it to freeze plans for a retail share sale to the public.

The government on Friday said it had sold £1.24bn worth of shares in NatWest to the bank via a buyback. The sale reduces its stake to 22.5 per cent, down from 38 per cent at the end of last year.

The latest disposal came after the Treasury suspended plans to press ahead with a mass sale of NatWest shares to the public after the government called the election. The sale had been expected to take place this summer.

Sportswear retailer JD Sports posted a 66 per cent jump in annual profits despite a “volatile” market and maintained its earnings guidance for this year. 

The FTSE 100 company posted a 2.7 per cent increase in revenue to £10.3bn for the 12 months to January 27, while statutory pre-tax profit rose to £806.4mn from £486.7mn the previous year. 

Sales were sluggish in the first quarter as discounting by rivals remained high, but chief executive Régis Schultz said he was “confident that the global sportswear market, and in particular, the athleisure space within it, has many years of structural growth ahead of it”.

UK house prices returned to growth in May on the back of strengthening consumer confidence, according to data published on Friday.

The lender Nationwide said house prices increased by 0.4 per cent between April and May, following two consecutive months of contraction, taking the annual rate of growth to 1.3 per cent.

Robert Gardner, Nationwide’s chief economist, said the market was “showing signs of resilience” despite the rise in quoted mortgage rates, which have edged up in recent months as hopes of an imminent interest rate cut from the Bank of England faded.

Semiconductor company STMicroelectronics will receive €2bn in government funding from the Italian government to set up a chip plant in Sicily, as Brussels seeks to boost the bloc’s chip supply in the sector, the EU executive said on Friday.

The project is an integrated chip plant for silicon carbide power devices used to make wafers that serve as a base for specific microchips. 

It will receive approximately €2bn in direct grants to the French-Italian company to support investments worth €5bn in total, the EU said on Friday.

The multibillion-euro aid is in line with the objectives set up in the 2023 European Chips Act, a €43bn plan to subsidise semiconductor production in Europe to help guarantee supply and to catch up with Asia.

Japanese equities rose on Friday following the release of economic data that bolstered the case for the Bank of Japan to raise interest rates.

The benchmark Topix stock index added 1.6 per cent, buoyed by jumps in the utilities and property sectors.

Data on Friday showed the Tokyo consumer price index, a leading indicator for inflation in the country, rose 2.2 per cent in May, in line with Bloomberg consensus estimates but above the BoJ’s 2 per cent inflation target. Official data also showed retail sales and housing starts beat expectations.

The inflation reading raises the chances of a BoJ rate increase at their next meeting on June 13-14.

EU economic data: Eurozone inflation data for May will be published. France releases quarterly gross domestic product figures and inflation estimates, while Germany publishes retail trade turnover figures for April.

UK house prices: Nationwide will publish its latest monthly House Price Index for May. April data showed prices unexpectedly fell for the second month in a row, falling 0.4 per cent between March and April. Economists polled by Reuters predict growth of 0.1 per cent between April and May.

Bank of England: The UK’s central bank releases data on consumer credit and mortgage approvals.

Proxy adviser Institutional Shareholder Services has counselled Tesla shareholders to vote against Elon Musk’s $56bn pay award, but supported a proposal to reincorporate the electric-vehicle maker in Texas, in a mixed result for the board ahead of its annual meeting next month.

“Although the achievement of the grant’s performance hurdles and the substantial growth in the company’s size and profitability are fully recognized, the award value was considered outsized from the start,” ISS said in a report on Thursday. 

The advice echoes that of proxy peer Glass Lewis, which last week said the chief executive’s package of share options — the largest in US corporate history — was an “excessive size”.

Donald Trump was urged to pick Nikki Haley for vice-president at dinner on Thursday night, according to grocery store magnate and major Republican donor John Catsimatidis.

Catsimatidis said on his radio station that Trump “went around the room” and asked dinner guests who he should choose as a running mate. The “top selections” were Tim Scott, Doug Burgum, Mike Pompeo and Nikki Haley — his final rival in the Republican primary.

“A lot of people picked Nikki Haley,” said Catsimatidis.

Catsimatidis said his view at the dinner was that Trump should not only pick a running mate but an entire cabinet.

Hong Kong equities rebounded during early trading on Friday, with Chinese tech groups leading gains even as the Nasdaq Composite sold off on Thursday.

The benchmark Hang Seng index climbed 1.8 per cent while the Hang Seng Tech index added 2.5 per cent. Electric-vehicle manufacturer Nio led gains as it added 10.7 per cent.

Mainland China’s CSI 300 index rose 0.4 per cent following the release of official data that showed activity in the country’s manufacturing sector unexpectedly shrank in May.

In currency markets, the Korean won continued its slide against the US dollar, weakening 0.4 per cent to Won1,380.08.

China’s manufacturing activity unexpectedly shrank in May, adding to pressure on policymakers in Asia’s largest economy.

The country’s official purchasing managers’ index stood at 49.5 in May, missing expectations and contrasting with recent expansions in April and March. A reading below 50 indicates a contraction from the previous month.

The Chinese government has emphasised the need for high-end manufacturing against an economic backdrop that has for years been dominated by a property slowdown and weak consumer demand.

Beijing, which has set a growth target of 5 per cent for the full year, this month also unveiled new measures to support the real estate sector.

Events: Leaders and defence ministers gather in Singapore for the Shangri-La Dialogue.

Economic data: China releases purchasing managers’ index data for May, Hong Kong publishes April retail sales and Japan announces inflation data for Tokyo. India’s first-quarter gross domestic product data is due.

Corporate updates: Foxconn, Li Auto, Geely and Xinyi Solar host their annual meetings.

New York City mayor Eric Adams has said the police force “stands ready” to respond to large-scale protests following the conviction of former president Donald Trump in a “hush money” trial.

“While peaceful protests and assembly will always be protected, we will not be a city of any form of lawlessness,” Adams said in a statement.

Earlier this month the New York Police Department stormed Columbia University to break up pro-Palestine protests. Adams, a former NYPD captain, defended the decision.

On Thursday a Manhattan jury found Trump guilty on all counts of falsifying business records to cover up a “hush money” payment to a former porn actress. He will be sentenced on July 11.

Manhattan district attorney Alvin Bragg acknowledged Donald Trump was “a defendant unlike any other in American history” but said his office had handled the case the way it would any other.

“I did my job. Our job is to follow the facts without fear or favour. And that’s what we did here,” he said after the verdict on Thursday.

He declined to say whether he would seek a prison sentence for the former president.

“This type of white-collar prosecution is core to what we do at the Manhattan district attorney’s office,” Bragg said.

Donald Trump insisted he was “a very innocent man” and the victim of a “rigged” trial in his first comments after the guilty verdict was handed down.

Speaking outside the courtroom, the former president argued that the jury pool was pulled from a New York region where he is deeply unpopular, and accused the prosecution of being politically motivated — allegations he has made throughout the trial.

Although the case was brought by a New York state prosecutor in Manhattan, Trump argued it was orchestrated by President Joe Biden in order to damage him politically ahead of the presidential election.

US President Joe Biden’s campaign has broken its silence on Donald Trump’s “hush money” trial and said the only way to keep the newly convicted felon out of the White House was to vote.

As the presumptive Republican presidential nominee, Trump will still be on the ballot on election day, despite his new status as a convicted felon.

“There is still only one way to keep Donald Trump out of the Oval Office: at the ballot box,” Biden campaign communications director Michael Tyler said on Thursday.

“Convicted felon or not, Trump will be the Republican nominee for president,” Tyler said.

Donald Trump has been found guilty of conspiring to buy the silence of a porn actor days before the 2016 election and covering his tracks in business records, becoming the first former US president to be convicted of a crime as he seeks a second term in office.

The unanimous verdict in the Manhattan “hush money” case came at just after 5pm local time on Thursday afternoon, after almost two days of deliberation by the seven men and five women of the jury. 

Over the course of the five-week trial, jurors had heard from one-time prominent figures in Trump’s orbit, who outlined a “catch and kill” scheme to suppress a story of an alleged extramarital encounter with Stormy Daniels, after she threatened to go public with her tale.

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The Nasdaq Composite notched its biggest drop in a month, as an afternoon sell-off took hold.

The tech-heavy index closed 1.1 per cent lower on Thursday, its worst one-day fall since the end of April. The benchmark S&P 500 fell 0.6 per cent, while in contrast to its bigger cousins, the small-cap focused Russell 2000 added 1 per cent.

Investors are now turning their attention to inflation figures on Friday morning, when the personal consumption expenditures price index data are released. Economists forecast the headline index, which the Federal Reserve uses to set its 2 per cent inflation target, to remain steady at an annual pace of 2.8 per cent in April.

US Treasuries recovered ground after a sell-off on Wednesday. The yield on the 10-year note fell 0.08 percentage points to 4.55 per cent. The yield on the two-year note dropped by 0.06 percentage points to 4.93 per cent.