TL;DR

Trump doubles steel tariffs; U.S. macro data weakens; China rare-earth curbs threaten auto supply.

Highlights

• Trump to double U.S. steel and aluminum tariffs to 50% from June 4; Cleveland-Cliffs Inc. shares jump 26%1.
• U.S. House passes major Trump tax bill (13% cut, $13k pay raise, $4T deficit impact); Senate debate next15.
• Court challenge creates uncertainty over Trump’s 10%/30% tariffs; temporary stay keeps tariffs in place for now17.
• China’s rare-earth export curbs threaten to halt U.S./EU/India auto production within weeks; supply chain risk elevated9.
• U.S. consumer spending slows, April imports drop 19.8%, Q1 GDP contracts 0.3%; manufacturing and services weaken19.
• Treasury Secretary Bessent rules out U.S. default as debt ceiling nears; Trump-Xi call expected on minerals/trade2.
• Fed’s Waller signals possible 2025 rate cuts if inflation and tariff effects moderate; ECB likely to cut June 53.
• Nvidia Q1 revenue surges 69% to $44.1B; $10.5B lost sales from China export controls, analysts stay bullish4.
• Japan sees record $12B stock outflow, 30-year JGB yield at 3%; yen strength and carry trade risks rise11.
• U.S. Senate to advance 500% tariff sanctions on Russian energy buyers (China/India); asset seizure provisions included16.
• BlackRock’s IBIT Bitcoin ETF posts record $431M outflow; Ethereum ETFs see inflows, SEC questions staking ETF structures1014.
• Canadian wildfires threaten 500,000 b/d oil sands output; U.S. air quality alerts issued, energy supply at risk8.

Commentary

U.S. trade and fiscal policy take center stage this week. Trump’s move to double steel and aluminum tariffs is set to benefit domestic producers but raises costs for downstream sectors, especially autos and construction1. The legal uncertainty over broader 10%/30% tariffs remains unresolved, with a temporary stay keeping them in place but refund risk looming for importers17. At the same time, China’s rare-earth export curbs are a direct threat to U.S. and global auto production, compounding supply chain pressures and raising input cost risks across manufacturing9.

Macro data confirm the strain: U.S. consumer spending slowed in April, imports fell nearly 20%, and Q1 GDP contracted 0.3%19. Manufacturing and services both weakened, while consumer confidence dropped19. The House’s narrow passage of a sweeping Trump tax bill could provide future stimulus, but with a projected $4 trillion deficit impact and contentious Senate negotiations ahead, near-term policy clarity is lacking15. Treasury Secretary Bessent is working to calm debt ceiling concerns, but the July deadline and ongoing trade disputes with China keep fixed income markets on edge2.

Central banks are in focus. Fed Governor Waller signaled openness to 2025 rate cuts if inflation and tariff effects prove manageable, while the ECB is expected to cut rates June 53. However, global bond volatility is rising: Japan’s 30-year yield hit 3%, sparking record outflows and yen strength, which could unwind carry trades and tighten U.S. Treasury liquidity11.

In equities, Nvidia ’s strong quarter highlights persistent AI demand, though U.S.-China chip restrictions remain a headwind4. Retail investors are driving a broad U.S. stock rally, even as hedge funds and institutions turn defensive20. In commodities, Canadian wildfires threaten oil sands output and U.S. air quality, potentially supporting North American crude prices if disruptions escalate8. Crypto markets saw record Bitcoin ETF outflows, while Ethereum ETFs attracted inflows amid SEC scrutiny of staking products1014.

Key watch items for Monday: tariff implementation/legal updates, rare-earth supply headlines, Senate sanctions progress, ECB decision, and U.S. macro data for signs of further slowdown.