CNBC Daily Open: Funny how the S&P 500 is teasing a new high amid uncertainties

• The S&P 500 is at the cusp of a new high. 
• Trump threatened Spain with a tough trade deal.
• Nvidia’s the most valuable company again. 
• China urges more support for Belt and Road Initiative.
• Risks could knock the S&P 500 off course.

Have we gone back in time? It certainly seems on the markets front. Just look at the S&P 500 and you will think that it’s back in February — before U.S. President Donald Trump’s “reciprocal” tariffs, before the White House’s “One Big Beautiful Bill Act,” and before the war between Israel and Iran.  

On February 19, the broad-based index closed at an all-time high of 6,144.15. Yesterday, it ended the trading session at 6,092.16. That’s a difference of less than 1%. A light breeze (or rogue social media post from the sitting U.S. president) could push the S&P 500 beyond that level.

In another sign investors seemed to be back to the days before trade and geopolitical uncertainty, Nvidia’s again in the headlines after it surged 4.3% to close at a new high, a symbol of the optimism surrounding artificial intelligence that drove much of 2024’s market gains.

What’s strange is that the market appears to have shrugged off heavy loads that have been weighing it down since March.

Tariff worries still persist. Trump on Wednesday threatened Spain that he would “make them pay twice as much” in a trade deal because the European country is resisting an increase in spending on defense.

The war between Israel and Iran, though currently paused thanks to a ceasefire, is not conclusively over. And that truce appears fragile — it was almost broken just hours after it kicked in. Who knows how the planned U.S. talks with Iran next week will go. (As long as it doesn’t descend into the shouting match in the Oval Office when Ukrainian President Volodymyr Zelenskyy was there, I’d consider it a success.)

Nostalgia is alluring. But that allure can be dangerous.

What you need to know today

The S&P 500 is at the cusp of a new high. The index, however, ended Wednesday little changed. Tech stocks rose, with many hitting intraday highs. But Asia-Pacific markets mostly fell Thursday, with Japan’s Nikkei 225 one of the few indexes in the green.

Trump threatened Spain with a tough trade deal. The U.S. president made those comments at NATO’s annual summit after the alliance’s allies — barring Spain — agreed to meet a defense spending target of 5% of gross domestic product by 2035.

Nvidia’s the most valuable company again. Shares jumped 4.3% on Wednesday and closed at a record — the first time it’s done so since January. Asian chip stocks chased Nvidia’s highs on Thursday.

China urges development bank to support Belt and Road. Chinese Premier Li Qiang on Thursday exhorted the Asian Infrastructure Investment Bank, a Beijing-backed development bank, to increase its support for the Beijing-launched regional development program.

[PRO] Investors are holding their breath. The U.S. market seems surprisingly resilient to trade friction and geopolitical instability. In fact, the S&P 500 seems on track to close at a fresh record. But risks that could knock it off course remain.

And finally…

Japan rice crisis shows signs of easing as stock return to shelves

After months of soaring rice prices, Japanese consumers may be finally getting some relief.

Data from Japan’s agriculture ministry showed that the average price of a 5-kg bag of rice had fallen to 3,920 yen ($27.03) for the week ending June 15. It’s the first time that the price dropped below the 4,000-yen mark since the week that ended on March 2.

That’s partly thanks to the government releasing its rice reserves. But many consumers are concerned that the stockpiled rice is old and not as tasty, according to a professor of Japanese business.

— Lim Hui Jie