TL;DR

U.S.-Iran nuclear tensions escalate; Fed warns tariff-driven inflation; NATO boosts defense spending target.

Highlights

• Conflicting reports on U.S. strikes: Trump claims Iran’s nuclear sites “obliterated,” but leaked DIA assessments say core facilities remain largely intact, with only months of setback122014.
• Iran’s parliament votes to end all IAEA cooperation, suspending nuclear monitoring and increasing transparency risks15.
• IAEA chief urges Iran to restore inspector access, warning of inability to verify 400kg of near-weapons-grade uranium315.
• NATO raises defense spending target to 5% of GDP over the next decade, signaling higher military budgets4.
• China tightens controls on rare-earth industry experts, compounding existing export restrictions and raising global supply chain risks6.
• Fed Chair Powell warns summer U.S. inflation will rise due to tariffs, likely delaying rate cuts; BOJ faces similar pressures16.
• Tesla ’s EU sales fall 28% in May despite strong regional EV demand; BYD cuts China production amid inventory buildup and price war89.
• Federal judge blocks Trump administration’s freeze on $5B in EV charger grants, supporting state-level EV infrastructure rollout7.
• UK funds Ukraine missile shipment using interest from frozen Russian assets, setting precedent for asset use5.
• Worldline shares plunge over 20% after media probe alleges years of AML failures and fraud cover-ups10.
• HSBC upgrades Broadcom to Buy, citing strong AI chip demand and raising target to $40017.
• Guotai Junan International’s Hong Kong shares double after winning first major mainland-backed crypto trading license11.

Commentary

U.S.-Iran tensions remain front and center after conflicting reports on the effectiveness of recent American strikes on Iranian nuclear facilities. While President Trump asserts the sites were destroyed, leaked U.S. intelligence suggests Iran’s enrichment program was only delayed by months120. Iran’s move to suspend IAEA cooperation eliminates international monitoring, raising the risk of undetected nuclear activity15. The IAEA’s push for renewed access and the lack of clarity on the true state of Iran’s nuclear capability could keep oil and defense-related assets in focus315.

NATO’s agreement to raise defense spending to 5% of GDP marks a significant shift in allied military budgets, likely supporting U.S. defense contractors and related equities over the medium term4. Meanwhile, China’s tighter controls on rare-earth industry personnel add further uncertainty to global supply chains, especially for U.S. tech, EV, and defense manufacturers already navigating higher tariffs and ongoing trade friction6.

On the macro front, Fed Chair Powell’s warning that tariffs will push summer inflation higher—potentially delaying rate cuts—keeps U.S. yields and the dollar supported. The BOJ is also signaling concern over persistent inflation16. These dynamics suggest continued caution for rate-sensitive sectors and risk assets, with traders watching upcoming inflation prints closely16.

In equities, the EV sector remains under pressure: Tesla ’s sharp EU sales decline and BYD’s production cuts highlight intensifying competition and weak demand89, while a federal court ruling in favor of EV charger grants offers a modest positive for U.S. infrastructure plays7. AI and semiconductors continue to attract interest, with HSBC’s upgrade of Broadcom underscoring strong demand for AI chips17. In contrast, Worldline’s sharp selloff after AML probe headlines raises ongoing regulatory risk in the payments space10. Crypto sentiment is buoyed by Guotai Junan’s Hong Kong license win, though immediate U.S. trading impact is limited11.