TL;DR

Trump signs tax-cut bill; $4T deficit projected; Hamas signals Gaza ceasefire; U.S. strikes Iran.

Highlights

• Trump signed the "One Big Beautiful Bill Act," making 2017 tax cuts permanent and raising the child tax credit to $2,200 1.
• The bill exempts up to $25,000 in annual tips and overtime from federal income tax through 2028 1.
• $121.5B allocated for border security, with funding for wall construction, detention, and ICE hiring 1.
• The law is projected to add ~$4 trillion to the federal deficit over 10 years; Medicaid and SNAP cuts could remove coverage for 11.8 million people 1.
• Gambling loss deductions are capped at 90%, impacting professional gamblers; prediction markets and CFTC-regulated contracts gain a relative tax advantage 5.
• The American Gaming Association supports the bill but seeks changes to the gambling tax cap; casino lobby backs current provisions 5.
• Hamas has given a positive response to a U.S.-brokered 60-day Gaza ceasefire plan; Israel is reviewing the proposal 2.
• The proposed Gaza truce includes a halt to fighting, phased hostage/prisoner exchanges, and increased humanitarian aid 2.
• Trump confirmed a recent U.S. airstrike in Iran ("Operation Midnight Hammer"); no operational details released 3.
• Explosions at Spain’s Envirobat lithium battery recycling plant caused a major toxic fire, but no injuries reported 4.

Commentary

The permanent extension of the 2017 tax cuts and expanded child tax credit in the newly signed U.S. fiscal package will likely support consumer spending, especially among middle-income households 1. The exemption of tips and overtime from federal tax through 2028 is an additional boost for service-sector workers 1. However, the projected $4 trillion increase in federal deficits and significant cuts to Medicaid and SNAP could pressure Treasury yields and raise concerns about long-term fiscal sustainability, particularly for rates and credit markets 1.

The new cap on gambling loss deductions is a headwind for professional gamblers and may shift activity toward prediction markets and CFTC-regulated contracts, which retain more favorable tax treatment 5. Casino operators may see a marginal benefit as sharp bettors are penalized, but the American Gaming Association's intent to seek amendments signals ongoing industry debate 5.

Geopolitical risk remains in focus. Hamas's conditional acceptance of a U.S.-brokered Gaza ceasefire could reduce short-term regional tensions if Israel agrees, with possible implications for energy markets and defense stocks 2. However, confirmation of a recent U.S. airstrike in Iran adds an element of uncertainty, keeping traders alert to further developments in the Middle East 3.

The fire at Spain’s Envirobat battery recycling plant has not caused injuries but could raise questions about lithium supply chains and environmental risk in Europe 4. While direct U.S. market impact is limited, traders in battery materials and EV supply chains should monitor for any spillover effects.