Highlights

• The Federal Reserve held rates steady at 4.25%–4.50%, warning of heightened risks to both inflation and employment; Chair Powell emphasized patience amid tariff and economic uncertainty 14.
• Alphabet shares plunged up to 9% after Apple confirmed it is considering alternative AI search providers for Safari, jeopardizing Google’s $20B/year default search deal 2.
• President Trump ruled out lowering the 145% tariff on China, while Treasury Secretary Bessent announced initial US-China trade talks will start Saturday; economic pressure is reportedly building in China 38.
• Ford announced price hikes of up to $2,000 on Mexican-built models (Mustang Mach-E, Maverick, Bronco Sport) in response to Trump’s tariffs 5.
• Disney beat Q2 earnings estimates, raised its FY25 outlook, and unveiled plans for its first Middle East theme park in Abu Dhabi; shares surged as much as 11% pre-market 6.
• CrowdStrike will cut 5% of its workforce but reaffirmed FY26 guidance, citing AI-driven productivity and a focus on high-growth cybersecurity segments 7.
• Republicans advanced plans to cut Medicaid by $880 billion over 10 years, threatening coverage for up to 79 million Americans and risking state budget shortfalls 11.
• Houthi missile launched from Yemen toward Israel fell over Saudi Arabia without interception; no casualties or escalation reported 9.
• US and Israel are in early talks about a temporary US-led administration to demilitarize and stabilize Gaza post-conflict 10.
• Xi Jinping arrived in Moscow for Victory Day celebrations, deepening China-Russia ties as both countries expand military and trade cooperation 12.
• Putin and Maduro signed a 10-year strategic partnership covering energy, defense, and technology, further cementing Russia-Venezuela ties 13.
• Apple Watch shipments fell 19% in 2024, marking a second year of declines amid lack of new features and weak North American demand 15.

Commentary

The Fed’s decision to hold rates steady, paired with a cautious tone on inflation and employment risks, has set a “wait-and-see” backdrop for markets 14. Powell’s emphasis on patience and the low cost of waiting, especially amid tariff uncertainty, signals no imminent policy change—keeping rates higher for longer 4. This stance, combined with President Trump’s refusal to lower tariffs on China 3 and Ford ’s tariff-driven price hikes 5, underscores persistent trade-related headwinds for both US and global growth. Initial US-China trade talks this weekend could be a catalyst 8, but with high tariffs firmly in place 3, traders should temper expectations for a near-term breakthrough.

Equities are responding unevenly to sector-specific news. Tech is under pressure after Alphabet’s sharp selloff—Apple ’s openness to alternative AI search providers threatens Google’s core ad business and injects new uncertainty into the AI/search landscape 2. Disney , by contrast, delivered a strong quarter, boosted guidance, and announced international expansion, providing a rare bright spot for consumer discretionary and media 6. Meanwhile, CrowdStrike ’s layoffs and strategic pivot toward AI and high-growth cyber segments are being interpreted as proactive cost control rather than distress, helping to shore up sentiment in the cybersecurity space 7.

Geopolitical risks remain elevated but have yet to trigger broad risk-off moves. The failed Houthi missile launch and preliminary US-Israel talks on Gaza stabilization have not escalated into wider conflict 910, but Middle East headlines continue to warrant close monitoring for any impact on energy markets. The deepening China-Russia partnership 12 and Russia-Venezuela energy/defense pact 13 reinforce the ongoing fragmentation of global alliances, which could have longer-term implications for commodities, defense stocks, and emerging market risk premiums.

In fixed income, the Fed’s patient stance and ongoing fiscal debates—particularly the prospect of major Medicaid cuts—may keep Treasury yields range-bound in the near term, as investors weigh growth risks against sticky inflation 111. The dollar could remain firm, supported by relative US policy stability and ongoing global uncertainty, while commodities (notably energy) may see episodic volatility on geopolitical news but lack a clear directional driver today.

Heading into the close, traders should watch for late-session volatility in mega-cap tech (Alphabet, Apple ), any headlines from the US-China or Middle East fronts, and positioning into tomorrow’s open as markets digest the Fed’s cautious tone and a mixed batch of corporate and geopolitical developments 12348910. Defensive posturing and selective sector rotation remain prudent in this environment.