TL;DR

U.S. yields spike, equities drop; Bitcoin hits record on U.S. stablecoin bill; Russia/Ukraine tensions escalate.

Highlights

• U.S. equities fell sharply (Dow -816 pts, S&P 500 -1.6%) as 30-year Treasury yields hit 5.09% after a weak bond auction and Moody’s U.S. debt downgrade1.
• Norinchukin Bank posted a record $12.6B loss on U.S. Treasuries and foreign bonds, highlighting global fixed income stress14.
• Bitcoin reached a new all-time high above $109,500, boosted by U.S. Senate progress on stablecoin regulation2.
• gold rose 0.7% while the U.S. dollar weakened 0.6% against the yen; oil prices declined1.
• EU Parliament approved 100% tariffs on Russian and Belarusian fertilizers from July, raising input costs for EU agriculture5.
• Over 80 U.S. senators support new Russia sanctions; EU/UK officials urge seizure of €200B frozen Russian assets for Ukraine820.
• Ukrainian drones struck Russian defense plants, disrupting Moscow airports; Russia deployed nuclear-capable R-37 missiles and modernized bombers1211.
• Germany targets 5% of GDP for defense spending and deploys a permanent brigade in Lithuania10.
• The EU is preparing a revised trade proposal for the U.S., with €95B in potential retaliatory tariffs if talks fail9.
• China’s Coast Guard used water cannons on Philippine vessels in the South China Sea, causing a minor collision6.
• IEA warns of critical minerals supply risks due to China’s 70% market share, urging Western diversification7.
• U.S. will not renew Chevron ’s Venezuela oil license after May 27, affecting crude flows16.
• India’s Russian oil imports hit a 10-month high, increasing ESPO demand and supporting Russian revenues15.
• Rio Tinto CEO Stausholm to step down amid a strategic shift toward lithium and energy transition metals17.
• Honeywell to acquire Johnson Matthey’s Catalyst Technologies for $2.4B, expanding into energy transition tech18.
• North Korea launched cruise missiles into the East Sea, sustaining regional security tensions13.

Commentary

A sharp repricing in global rates markets triggered broad equity and bond selloffs, with the U.S. 30-year yield breaching 5% after a weak Treasury auction and Moody’s downgrade of U.S. debt1. The Norinchukin Bank’s $12.6B loss on Treasuries and foreign bonds underscores the pressure on global portfolios exposed to duration risk, particularly as fiscal policy debates in Washington raise concerns about further supply and sovereign risk141. The dollar weakened against the yen, gold saw renewed demand, and oil prices slipped, reflecting classic risk-off positioning and shifting energy flows1.

Crypto markets diverged, with Bitcoin breaking above $109,500 on optimism for U.S. stablecoin regulation2. This move, driven by policy clarity and liquidations of short positions, stands out against the broader risk-off tone in traditional assets2. Meanwhile, the IEA’s warning on critical minerals supply—given China’s dominant market share—keeps supply chain security and metals pricing in focus, as Western economies push for “friend-shoring” and strategic stockpiles7.

Geopolitics remain a key driver: the Russia-Ukraine conflict escalated with Ukrainian drone strikes on Russian defense plants and Russia’s deployment of new nuclear-capable missiles1211. The West is intensifying pressure, with U.S. lawmakers pushing new sanctions and EU/UK officials advocating for the seizure of frozen Russian assets820. Germany’s commitment to higher defense spending and a permanent NATO brigade in Lithuania signals further militarization in Europe10. In Asia, China’s assertive actions in the South China Sea and North Korea’s missile launches sustain regional risk premiums613.

In commodities, the EU’s 100% tariffs on Russian/Belarusian fertilizers and India’s record Russian oil imports are shifting global trade flows and input costs515. The U.S. decision not to renew Chevron ’s Venezuela license will further tighten crude supply options16. Corporate activity is notable: Honeywell ’s acquisition of Johnson Matthey’s catalyst unit and Rio Tinto ’s leadership change both reflect the strategic pivot toward energy transition and supply chain resilience1817.

Traders should closely watch U.S. bond market stability, fiscal policy headlines, and further escalation in Russia/Ukraine and Asia-Pacific tensions. Monitor sector rotation into defense, energy transition, and supply chain-linked equities, while remaining alert to volatility in rates, commodities, and crypto.