TL;DR

US banks pass stress test; Trump pushes Fed for deeper cuts; US-Canada trade talks suspended.

Highlights

• All 22 US megabanks passed the Fed’s 2025 stress test, maintaining strong capital buffers; updated capital buffer rules expected in August may allow new dividend and buyback plans 2.
• President Trump renewed public pressure on the Fed for 2–3 percentage points in rate cuts, called for Chair Powell’s resignation, and signaled he would nominate a dovish successor next year 1.
• Senate Republicans scheduled a Saturday procedural vote on Trump’s major tax bill, targeting passage before July 4; the bill faces GOP and Democratic resistance, with key provisions under review 3.
• Trump suspended US-Canada trade talks over Canada’s digital services tax on US tech firms, warning of possible tariffs; Canadian PM Carney pledged to keep negotiating despite US threats 412.
• The Senate blocked a resolution to restrict Trump’s Iran war powers, leaving his authority for unilateral military action unchanged amid recent strikes and fragile Middle East diplomacy 9.
• Iran warned Trump to change his tone toward Supreme Leader Khamenei or risk stalling nuclear talks, following recent US strikes and a tenuous cease-fire 11.
• Ripple and the SEC agreed to drop appeals in their XRP lawsuit, ending a multi-year regulatory dispute 5.
• Tesla completed its first fully autonomous vehicle delivery in Texas and filed for fast-track EU approval of its Full Self-Driving software 6.
• OpenAI began leasing Google Cloud TPUs for AI workloads, reducing reliance on Nvidia chips and intensifying AI hardware competition 7.
• Meta is seeking $29 billion in private credit to fund new AI data centers, highlighting the scale of AI infrastructure investment 13.
• Palantir shares fell 11% amid a 40 million-share block sale during the annual Russell index rebalancing; megacap tech stocks rose 8.
• The Supreme Court limited the ability of lower courts to issue nationwide injunctions against executive actions, changing the landscape for regulatory challenges 14.
• Senate Republicans advanced a plan to halve the CFPB’s budget, potentially curbing consumer protection oversight 10.

Commentary

US financials received a boost as all 22 megabanks cleared the Fed’s latest stress test, with capital ratios remaining well above regulatory minimums even under adverse scenarios 2. This outcome removes immediate capital concerns and sets the stage for banks to announce dividend and buyback plans once final capital buffer settings are published in August 2. The results could support bank stocks and financial sector sentiment into next week.

Macro policy remains in focus. President Trump’s renewed calls for aggressive Fed rate cuts—well beyond what the central bank has signaled—underscore ongoing political pressure on monetary policy 1. His comments on Powell’s future add uncertainty to the Fed’s leadership outlook 1. Meanwhile, the Senate is set for a weekend vote on Trump’s tax package, which includes tax cuts, energy incentives, and border measures, though internal GOP divisions and Democratic opposition could delay or reshape the bill 3.

Trade and geopolitical risks are back in play. Trump’s suspension of US-Canada trade talks over Ottawa’s digital tax on US tech firms raises the risk of new tariffs and cross-border supply chain disruptions, with Canadian officials signaling a willingness to keep negotiating 412. In the Middle East, the Senate’s refusal to limit Trump’s Iran war powers and Iran’s warnings over US rhetoric highlight persistent instability, which could impact oil and defense-related assets 911.

In tech, Tesla ’s autonomous delivery and EU regulatory filing suggest ongoing momentum in self-driving technology 6, while OpenAI’s move to Google TPUs and Meta’s $29 billion data center financing highlight the growing competition and capital intensity in AI infrastructure 713. The resolution of the Ripple -SEC lawsuit removes a key regulatory overhang for XRP and may improve sentiment in crypto markets 5.

Traders should watch for post-close bank capital return announcements, weekend developments on the tax bill, and any escalation in US-Canada trade tensions or Middle East events 23491112. The Russell rebalance’s outsized flows—evidenced by Palantir ’s sharp drop—could create further volatility in small- and mid-cap names into next week 8.