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June 6, 2025

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S&P 500 on the Verge of 6,000: What’s at Stake?

Stock 4 Mins Read

A lot has happened in the stock market since Liberation Day, keeping us on our toes. Volatility has declined significantly, stocks have bounced back from their April 7 low, and the economy has remained resilient.

If you’re still feeling uncertain, though, you’re not alone. The stock market’s in a bit of a “wait and see” mode, going through a period of consolidation as it figures out its next move. 

The S&P 500 ($SPX) is hesitating to hit 6000 despite reclaiming its 200-day simple moving average (SMA). This indecision can leave investors feeling stuck in “no man’s land.” And it’s not just the S&P 500, either; most major indexes are in a similar scenario, except for small caps, which have been left behind. This could be because the market has priced in a delay in interest rate cut expectations.

Tech Is Taking the Lead

If you drill down into the major indexes, there is some action you shouldn’t ignore. Tech stocks have started to take the lead again, although momentum has been lacking. Over the past month, the Technology sector has been up over 4%.

FIGURE 1. S&P SECTOR ETF PERFORMANCE OVER THE LAST 30 DAYS. Technology is the clear leader with a gain of over 4%.Image source: StockCharts.com. For educational purposes. It’s encouraging to see tech stocks regain their leadership position. Tech is a major force behind the S&P 500 and Nasdaq Composite ($COMPQ). The daily chart of the Technology Select Sector SPDR Fund (XLK) shows the ETF has been trying to break above a consolidation range it has been stuck in since mid-May.

FIGURE 2. DAILY CHART OF XLK. Although the ETF has barely broken above its consolidation range, we need to see greater momentum to confirm a follow through to the upside.Chart source: StockCharts.com. For educational purposes.Nothing is standing in the way of XLK reaching its all-time high, but the momentum isn’t quite there yet. The 14-period relative strength index (RSI) is below 70 and looks to be stalling, pretty much in line with the overall stock market’s price action.

So, what’s the market waiting for? Maybe a catalyst, like Friday’s non-farm payrolls report. This week’s JOLTS, ADP, and ISM Services data didn’t move the needle much, but the NFP report could be the game changer.

S&P 500 Technical Forecast

Where could the S&P 500 go from here? Let’s dive into the weekly chart.

FIGURE 3. WEEKLY CHART OF THE S&P 500. The index is spitting distance to its all-time high. A break above the November high would clear the path to new highs.Chart source: StockCharts.com. For educational purposes.

The S&P 500 broke above its 40-week SMA on the week of May 12 and has held above it. However, it has been in a consolidation for the last month, similar to that of XLK.

The S&P 500 is approaching its November high of 6017. A break above it could push it toward new highs. On the flip side, if it slides below the 40-week SMA, it would be a cause for concern and could mean the May 12 gap-up could get filled. Keep an eye on the 5688 level. If the S&P 500 pulls back close to that level and turns around, it would be a healthy correction — an opportunity to buy the dip. A further downside move would mean exercising patience or unloading some of your positions.

What’s Going On With Gold and Bonds?

While stocks are grinding sideways, gold prices are rising, and bond prices are showing green shoots. This price action tells us that investors could be bracing for slower growth ahead. It’s not something to panic about — just something to watch.

You can get a quick look at what gold, bonds, and all the major indexes are doing by checking out the StockCharts Market Summary page and Your Dashboard.

So, what should you do?

Hold, add, or fold? That’s the big question. The market needs time to digest a lot, from economic data to geopolitical risks and policy headlines. Keep checking in and monitor the sectors, observe index performance, and note how other areas of the market, such as precious metals and bonds, are reacting.

 Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

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Clusters of Long Winning Streaks: What They’re Telling Us

Stock 4 Mins Read

Recently, the S&P 500 ($SPX) has been racking up a good number of wins.

Since late April, the index has logged its third winning streak of at least five: a nine-day streak from April 22–May 2 and a six-day streak from May 12–May 19. That makes for a cluster of long winning streaks, which is something that also showed up in late 2023 and mid-2024.

To put it simply, these bunches of buying usually show up in uptrends. Note how there were no five-day winning streaks during the three corrections pictured on the chart below (in August–October 2023, July–August 2024, and February–April 2025). Most of the clusters happened as the S&P 500 was in the middle of a consistent upswing; the only time we saw a long winning streak occur right before a big downturn was in late July 2024. That came after a strong three-month run from the April lows, with the S&P 500 gaining 14% in three months.

CHART 1. WINNING STREAKS IN THE S&P 500. Since late April, the S&P 500 has logged a nine-day streak from April 22 to May 2 and a six-day streak from May 12 to May 19.

Currently, the SPX is up 23% in just under two months. It wouldn’t be surprising to see a break in the action at some point soon.

The key difference between now and July is that back in July, the S&P 500 was making new highs for two straight months. That’s not the case now, as the index is still below the February 2025 highs. So it’s not apples to apples, but, at some point, the market will have to deal with more than a minor pullback once again.

Sentiment Check

After the close on Wednesday, I ran an X poll asking if the 0.01% move was bullish or bearish. The result: 61% said bullish.

This tells us that most people saw Wednesday’s pause as a sign that the bears are unable to push the market higher, which could be true. But it also suggests complacency. The onus still is squarely on the bears to do something with this, with the only true sign of weakness in the last six weeks coming on May 21, when the S&P 500 plummeted 1.6%. That ended up being an aberration… for now.

UBER Stock: One to Watch

Sometimes, a specific stock can provide clues about the broader market’s next step. Right now, we think that the stock is UBER.

Technically speaking, UBER is at a critical spot, and it’s also an important stock given that it was one of the first growth names to break out to new all-time highs. The stock remains in a long-term uptrend, which, of course, is bullish, but it has quietly pulled back 13% from its May 20 high of $93 and was just down nine out of 10 trading sessions (see the weekly chart of UBER stock). We can see that the stock has fully retraced the price action from the pattern breakout near $82.

CHART 2. WEEKLY CHART OF UBER STOCK. The stock is in a long-term uptrend, although it has retraced. Here’s where things get really interesting. UBER has now formed a potential bearish head-and-shoulders pattern, seen on the daily chart. If the stock breaks below $82, it will target the 71-zone.

CHART 3. DAILY CHART OF UBER STOCK. Will UBER’s stock price hold support or break below it? This chart is one to monitor.

So, here are three outcomes to watch for. UBER’s stock price could:

  1. Hold support (bullish).
  2. Break below $82, but then reverse higher, which would be a bear trap (bullish).
  3. Break below $82 and continue lower and hit the downside target (bearish).

If #3 occurs, the odds are UBER won’t be declining by itself; it’ll likely drag the broader market down with it. This shows the significance of UBER stock, which certainly makes it one to keep an eye on.

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Three Charts Showing Proper Moving Average Alignment

Stock 5 Mins Read

I’m a huge fan of using platforms like StockCharts to help make my investment process more efficient and more effective.  The StockCharts scan engine helps me identify stocks that are demonstrating constructive technical configuration based on the shape and relationship of multiple moving averages.

Today I’ll share with you one of my favorite scans, called “Moving Averages in Correct Order”, and walk through three charts that highlight the benefits of identifying charts in primary uptrend phases.

Primary Uptrends Can Be Defined By Moving Averages

This scan, which StockCharts members can access in the Sample Scan Library, basically looks for three criteria to be met for any chart:

  1. 20-day EMA > 50-day SMA
  2. 50-day SMA > 100-day SMA
  3. 100-day SMA > 200-day SMA

The general approach here is to find charts where the short-term moving averages are above their longer-term counterparts.  By making multiple comparisons, we can ensure a more consistent uptrend phase based on the recent price action.  

Let’s review two charts that I feel are representative of the stocks that will tend to come up using this scanning approach.

You’ll Probably Find Two Types of Charts in the Results

The most common result will be a chart that is in a long-term primary uptrend, making consistently higher highs and higher lows.  Netflix (NFLX) is a great example of this sort of “long and strong” price action.

The four moving averages have remained in the proper order as described above for most of the last 12 months.  After NFLX pulled back to its April low, a bounce back above the March swing high moved the 21-day exponential moving average back above the 50-day simple moving average.  From that breakout point, the stock has continued to push to new all-time highs into early June.

One thing I love about this scan is it helps me confirm which stocks are in persistent uptrends, because those are the types of charts that I generally want to be following as they trend higher.  But sometimes, a pullback chart will come up in the scan as well.  Here’s TJX, which has recently pulled back after achieving a new all-time high in May.

We can see that the moving averages returned to the proper order in early April after rotating higher off a major low in mid-March.  From that point, TJX had a false breakout in mid-April before finally completing the move to a new high in early May.  TJX subsequently gapped lower after an earnings miss, and the stock has now pulled back to an ascending 50-day moving average.

The TJX chart reminds me of three benefits of following moving averages over time.  First, we can look at the slope of an individual moving average to evaluate the shape of the trend on a specific time frame.  Second, we can compare multiple moving averages to validate the trend on multiple time frames.  Finally, we can use moving averages as potential support and resistance levels in the event of a pullback.

With TJX testing an ascending 50-day moving average this week, I’m inclined to treat this chart as “innocent until proven guilty” as long as it remains above this key trend barometer.  But if and when the 50-day moving average is violated, and if the moving averages are no longer in the proper order, then I would need to reevaluate a long position.

Why the Transition to Proper Order is So Important

This final example shows how the transition between moving average configurations can prove so valuable in understanding trend transitions.  Here’s a daily chart of VeriSign (VRSN) showing how the relationship between the moving averages can help us better label the different trend phases.

On the left third of the chart, we can see the moving averages mostly in a bearish order, confirming a distribution phase for the stock.  Then in June 2024, the moving averages change to where there’s no real clean definition of the trend.  This represents a consolidation phase, where buyers and sellers are essentially in agreement.

Finally, we can see that when the moving averages finally achieve a bullish configuration, VRSN is now in an accumulation phase of higher highs and higher lows.  And as long as those moving averages remain in the proper order, the uptrend phase is confirmed.

The goal with this moving average scan is to help us identify charts that are just rotating into the accumulation phase.  It’s also designed to encourage us to stick with winning trends as long as the price action confirms the uptrend.  And if and when the moving average configuration changes, then our approach should probably change as well!

RR#6,

Dave

PS- Ready to upgrade your investment process?  Check out my free behavioral investing course!

David Keller, CMT

President and Chief Strategist

Sierra Alpha Research LLC

marketmisbehavior.com

https://www.youtube.com/c/MarketMisbehavior

Disclaimer: This blog is for educational purposes only and should not be construed as financial advice.  The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.  

The author does not have a position in mentioned securities at the time of publication.    Any opinions expressed herein are solely those of the author and do not in any way represent the views or opinions of any other person or entity.

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Trump Admin Strips “Safety” from AI Oversight Institute in Move to Rebrand

Investing 5 Mins Read

The Trump administration announced a rebrand of the US Artificial Intelligence (AI) Safety Institute, stripping the word “safety” from the organization’s title and mission.

The institute, once tasked with developing standards to ensure AI model transparency, robustness and reliability, will now be known as the Center for AI Standards and Innovation (CAISI). According to the announcement, its focus will be on enhancing US competitiveness and guarding against foreign threats, not constraining the industry with regulations.

The decision, announced on Tuesday (June 3) by US Secretary of Commerce Howard Lutnick, marks a sharp departure from the Biden-era posture on AI governance.

‘For far too long, censorship and regulations have been used under the guise of national security. Innovators will no longer be limited by these standards,” Lutnick said in a statement.

“CAISI will evaluate and enhance US innovation of these rapidly developing commercial AI systems while ensuring they remain secure to our national security standards.”

Established in November 2023 under President Joe Biden’s executive order on AI, the original AI Safety Institute was housed within the National Institute of Standards and Technology (NIST). It aimed to assess AI risks, publish safety benchmarks and convene stakeholders in a consortium focused on responsible AI development.

But with the Trump administration’s return to the White House, the emphasis has shifted.

Instead of curbing AI risks through regulation and safety protocols, the renamed CAISI will now prioritize “pro-innovation” objectives, including the evaluation of foreign AI threats, mitigation of potential backdoors and malware in adversarial models and avoidance of what the administration sees as regulatory overreach from foreign governments.

According to the commerce department, CAISI’s primary tasks will include collaborating with NIST laboratories to help the private sector develop voluntary standards that enhance the security of AI systems, particularly in areas like cybersecurity, biosecurity and the misuse of chemical technologies. The center will also establish voluntary agreements with AI developers and evaluators, and lead unclassified evaluations of AI capabilities that may pose national security risks.

In addition to those directives, CAISI will lead comprehensive assessments of both domestic and foreign AI systems, focusing on how adversary technologies are being adopted and used, and identifying any vulnerabilities, such as backdoors or covert malicious behavior, that could pose security threats.

The center is also expected to work closely with the Department of Defense, the Department of Energy, the Department of Homeland Security, the Office of Science and Technology Policy, and the intelligence community.

CAISI will remain housed within NIST and will continue to work with NIST’s internal organizations, including the Information Technology Laboratory and the Bureau of Industry and Security.

Rise of foreign AI spurs national security concerns

The reformation of the institute reflects Trump’s broader AI strategy: loosen domestic oversight while doubling down on global AI dominance. Within his first week back in office, Trump signed an executive order revoking Biden’s prior directives on AI governance and removed his AI policy documents from the White House website.

That same week, he announced the US$500 billion Stargate initiative — a massive public-private partnership involving OpenAI, Oracle and SoftBank Group (OTC Pink:SOBKY,TSE:9984) that is intended to make the US the global leader in AI.

The Trump administration’s pivot has been partly catalyzed by growing concerns over foreign AI competition, particularly from China. In January, Chinese tech firm DeepSeek unveiled a powerful AI assistant app, raising alarms in Washington due to its technical sophistication and uncertain security architecture.

Trump called the app a ‘wake-up call,” and lawmakers quickly moved to introduce legislation banning DeepSeek from all government devices. The Navy also issued internal guidance advising its personnel not to use the app “in any capacity.”

Signs of an impending transformation had emerged earlier in the year.

Reuters reported in February that no one from the original AI Safety Institute attended the high-profile AI summit in Paris that month, despite Vice President JD Vance representing the US delegation.

Trump’s One Big Beautiful Bill reshaping US AI governance

Trump’s massive One Big Beautiful Bill, which includes much of the aforementioned legislation, is poised to dramatically reshape the landscape of AI regulation in the US. The bill introduces a 10 year moratorium on state-level AI laws, effectively centralizing regulatory authority at the federal level.

This move aims to eliminate the patchwork of state regulations, which the administration claims would foster a uniform national framework to bolster American competitiveness in the global AI arena.

The bill’s provision to preempt state AI regulations has sparked significant controversy.

A coalition of 260 bipartisan state lawmakers from all 50 states has urged to remove this clause, arguing that it undermines state autonomy and hampers the ability to address local AI-related concerns. Critics also warn that the moratorium could delay necessary protections, potentially endangering innovation, transparency and public trust. They argue that it may isolate the US from global AI norms and reinforce monopolies within the industry.

Despite the backlash, proponents within the Trump administration assert that the bill is essential for maintaining US leadership in AI. The One Big Beautiful Bill is currently being debated in the US Senate.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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Should You Invest in Silver Bullion?

Investing 5 Mins Read

Investing in silver bullion has pros and cons, and what’s right for one investor may not work for another.

Interest in the silver market tends to flourish whenever the silver price increases, with investors beginning to wonder if silver is a good investment and it is the right time to add physical silver to their investment portfolios.

While silver can be volatile, the precious metal is also seen as a safe-haven asset, similar to its sister metal gold. Safe-haven investments can offer protection in times of uncertainty, and with tensions running high, they could be a good choice for those looking to preserve their wealth in difficult times.

With those factors in mind, let’s look at the pros and cons of buying silver bullion.

What are the pros of investing in silver bullion?

Silver can offer protection

Silver bullion is often considered a good safe-haven asset. As mentioned, investors often flock to precious metals in times of turmoil, politically and economically. For example, physical silver and gold have both performed strongly in recent years against a background of geopolitical instability and high inflation.

Silver bullion is a tangible asset

While cash, mining stocks, bonds and other financial products are accepted forms of wealth, they are essentially still digital promissory notes. For that reason, they are all vulnerable to depreciation due to actions like printing money. A troy ounce of silver bullion, on the other hand, is a finite tangible asset. That means that, although it is vulnerable to market fluctuations like other commodities, physical silver isn’t likely to completely crash because of its inherent and real value. Market participants can buy bullion in different forms, such as silver coins or silver jewelry, or they can buy silver bullion bars.

Silver’s cheaper and more flexible than gold

Compared to gold bullion, silver is significantly cheaper, which makes it more accessible for investors looking for an affordable entrance to the precious metals market. This can make it easier for investors to build up a portfolio over time.

Another benefit is that investors who need to convert their precious metals to currency will have an easier time selling a portion of their silver portfolio than those looking to sell part of their gold. Just as a US$100 bill can be a challenge to break at the store, divvying up an ounce of gold bullion can be a challenge. As a result, silver bullion is more practical and versatile, particularly for everyday investors who need flexibility in their investments.

Silver offers higher returns than gold

Silver tends to move in tandem with gold: when the price of gold rises, so too does the price of silver. Because the white metal is currently worth around 1/100th the price of gold, buying silver bullion is affordable and stands to see a much bigger percentage gain if the silver price goes up. In fact, silver has outperformed the gold price in bull markets. It’s possible for an investor to hedge their bets with silver bullion in their investment portfolio.

History is on silver’s side

Silver and gold have been used as legal tender for thousands of years, and that lineage lends them a sense of stability. Many buyers find comfort in knowing that silver has been recognized for its value throughout a great deal of mankind’s history, and so there’s an expectation that it will endure while a fiat currency may fall to the wayside. When individuals invest in physical silver, there is a reassurance that the metal has value that will continue to persist. Additionally, its increasing use as an industrial metal in the energy transition has improved the metals fundamentals even further.

What are the cons of investing in silver bullion?

Danger of theft

Unlike most other investments, such as stocks, holding silver bullion can leave investors vulnerable to theft. And of course, the more physical assets, including silver jewelry, that reside within your home, the more at risk you are for losing significantly if a burglary takes place. It’s possible to secure your assets from looting by using a safety deposit box in a bank or a safe box in your home, but this will incur additional costs.

Weaker return on investment

Silver may not perform as well as other investments, such as real estate or even other metals. Mining stocks, especially silver stocks that pay dividends, may also be a better option than silver bullion for some investors. Royalty and streaming companies are another option for those interested in investing in silver, as are exchange-traded funds and silver futures.

High silver demand leads to higher premiums

When investors try to buy any bullion product, such as an American silver ounce coin known as a silver eagle, they quickly find out that the physical silver price is generally higher than the silver spot price due to premiums used by sellers. What’s more, if demand is high, premiums can go up fast, making the purchase of physical silver bullion more expensive and a less attractive investment.

Bullion lacks quick liquidity

Silver bullion coins are not legal tender, meaning they can’t be used for every day purchases. Since the metal is usually used as an investment, this isn’t often an issue. However, it does mean that if silver needs to be sold in a hurry to cover expenses, investors will need to find a buyer. If you can’t access a bullion dealer and are in a jam, pawn shops and jewelers are an option, but they won’t necessarily pay well.

How to add physical silver to your portfolio?

How to buy silver digitally?

Larisa Sprott: Gold, Silver Early in Cycle, Smart Money Buying Now

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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Justin Huhn: Uranium Game On — Supply “Mirage,” De-risked Demand, Next Price Move

Investing 1 Min Read

Justin Huhn, editor and founder of Uranium Insider, talks uranium supply, demand and prices.

He emphasized that it’s still ‘very early’ in the cycle and that at this point no further catalysts are needed.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

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Business

This California startup is cleaning water and removing CO₂ from the atmosphere — all at a reduced cost

Business 3 Mins Read

As more parts of the world face intense drought, new technologies are emerging to clean and reuse existing water. Investors are seeing potential for big profits.

Water treatment is expensive. It uses a lot of energy and produces its own waste that gets disposed of at a hefty price. Capture6, a startup in Berkeley, California, says it’s developing a solution, and one with an added benefit to the environment.

Capture6′s technology repurposes industrial and water treatment waste, generating clean water and capturing carbon dioxide from the atmosphere.

“That combination of water treatment, brine management, and carbon capture all at once is part of what makes us unique, what makes our process innovative,” said Capture6 CEO Ethan Cohen-Cole, who co-founded the company in 2021. “We are able to do so at reduced energy costs.”

The process is complex. It starts with the waste from any sort of water treatment process. Once the solids are removed, that waste is called brine, which is leftover water plus concentrated salt — sodium chloride. Treatment facilities usually have to pay to get rid of it.

But Capture6 takes that brine, strips out the fresh water and separates the salt into sodium and chlorine. It then turns the sodium into lye.

“That lye has the really neat property that if you expose it to the air, it will bond with CO2 and strip it from the air, and that’s the punch line to the process,” said Cohen-Cole. “We have processed the waste salt, we’ve returned fresh water to our partner, and we’ve captured CO2 from the air.”

It’s a particularly attractive proposition in areas most in need of clean water. Capture6 is working in Western Australia, South Korea, and in drought-stricken California, at the Palmdale Water District north of Los Angeles. The district is still testing the technology, but is already projecting huge cost savings in its brine management.

“It will save us 10% on that capital cost, as well as saving us 20 to 40% in operational costs,” said Scott Rogers, assistant general manager at Palmdale Water District. “We’re recovering anywhere from 94% to 98% water out of water that would just normally be wasted.”

Rogers says it’s early but when more facilities start using the technology, it will create a circular economy that can benefit the environment.

Capture6 has raised $27.5 million from Tetrad Corporation, Hyundai Motors, Energy Capital Ventures, Elemental Impact and Triple Impact Capital.

Cohen-Cole says the company’s entire process could run on renewable energy, so all of the CO2 that it captures will be net negative, improving the environment. That allows the company to generate added revenue by selling carbon credits.

It’s just one technology in a growing field of carbon capture, removal and sequestration. Others include direct air capture, burying carbon underground or injecting it into the ocean.

The Trump Administration recently canceled $3.7 billion worth of awards for new technology, including carbon capture, to fight climate change. Capture6 has received funding from the U.S. Department of Energy and from state-level sources including California, according to the company. So far, none of that has been canceled.

— CNBC producer Lisa Rizzolo contributed to this piece.

This post appeared first on NBC NEWS

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Business

Shein and Temu see U.S. demand plunge as loophole for cheap goods closes

Business 3 Mins Read

Use of low-cost e-commerce giants Temu and Shein has slowed significantly in the key U.S. market amid President Donald Trump’s tariffs on Chinese imports and the closure of the de minimis loophole, new data shows.

Temu’s U.S. daily active users (DAUs) dropped 52% in May versus March, before Trump’s tariffs were announced, while those at rival Shein were down 25%, according to data shared with CNBC by market intelligence firm Sensor Tower.

DAUs is a measure of the number of people who visit or interact with a platform every 24 hours. Monthly active users (MAUs), a measure of user engagement over a 30-day period, was also down at Temu (30%) and Shein (12%) in May versus March.

The declines were also reflected in both platforms’ Apple App Store rankings. Temu averaged a rank of 132 in May 2025, down from an average top 3 ranking a year ago, while Shein averaged a rank of 60 last month versus a top 10 ranking the year prior, the data showed.

Neither Temu nor Shein immediately responded to CNBC’s request for comment.

The user drop off comes as both Temu and Shein have pulled back on U.S. advertising spend over recent months since the Trump administration’s tariff announcements.

Trump in April announced sweeping tariffs on Chinese imports, including the end of the “de minimis” tariff exemption on May 2, which allowed companies to ship low-cost goods worth less than $800 to the U.S. tariff-free.

In May, Temu’s U.S. ad spend fell 95% year-on-year while Shein’s was down 70%.

“Temu and Shein’s decline in US ad spend was also noticeable in April, as spend decreased by 40% and 65% YoY, respectively,” Seema Shah, vice president of research and insights at Sensor Tower, said in emailed comments to CNBC.

Both Temu and Shein also altered their logistics models in the wake of tariffs, shifting away from a drop shipping model, which allowed them to send items directly from Chinese suppliers to U.S. consumers, and instead, particularly in Temu’s case, building up a network of U.S. warehouses.

Rui Ma, founder and analyst at Tech Buzz China, said such moves were also likely to have impacted the companies’ ad spend strategy and customer acquisition patterns.

“All these additional costs and regulatory hurdles are clearly hurting Chinese platforms’ U.S. growth prospects,” she wrote in emailed comments.

Tech Buzz China research from March showed that a 50% tariff would be the point at which Temu would lose most of its price advantages and find it difficult to operate. The tariff on former de minimis imports currently stands at 54%, having been lowered from 120% amid a 90-day tariff truce between the U.S. and China.

Last week, Temu’s parent company PDD Holdings reported first-quarter earnings below estimates and pointed to tariffs as a significant pressure on sellers.

Temu’s popularity has nevertheless picked up outside the U.S., with non-U.S. users rising to account for 90% of the platform’s 405 million global MAUs in the second quarter, according to HSBC.

Writing in a note last week, HSBC analysts said that was “supported by growth in Europe, Latin America, and South America.” They added that the swiftest of that growth occurred in “less affluent markets.”

“Many (Chinese platforms) are now actively redirecting their efforts toward other markets such as Europe,” Ma said.

This post appeared first on NBC NEWS

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