TL;DR

Trump reignites China trade tensions; U.S. inflation cools, imports plunge; OPEC+ eyes oil output hike.

Highlights

• Trump accused China of violating the interim tariff deal; S&P 500 futures and China ETFs fell 1.
• U.S. to expand tech sanctions on China in June, targeting subsidiaries with 50%+ Chinese ownership 3.
• U.S. PCE inflation eased to 2.1% in April; core PCE at 2.5%, with personal income up 0.8% 2.
• U.S. goods imports fell nearly 20% in April, sharply narrowing the trade deficit to $87.6B 2.
• Atlanta Fed raised Q2 GDP growth estimate to 3.8%, driven by stronger net exports 14.
• JPMorgan CEO Dimon warned of potential bond market instability; bank prepared for 5% rates 9.
• OPEC+ to debate July output hike as Brent crude drops below $64; demand concerns persist 5.
• Senate to consider 500 new Russia sanctions and a 500% tariff on Russian oil buyers, with strong bipartisan support 6.
• Trump announced all automakers, including Tesla , must build entire vehicles in the U.S. within a year 11.
• Trump Media raised $2.3B to establish a large corporate Bitcoin treasury 13.
• Stripe is in talks with major banks to integrate stablecoins for global payments 12.
• Ulta Beauty jumped up to 16% after Q1 earnings and guidance beat expectations 10.

Commentary

U.S. equities faced renewed pressure as Trump’s accusation of China violating the interim tariff deal 1 and upcoming expansion of tech sanctions 3 reignited trade tensions. S&P 500 futures and China-exposed assets such as iShares China Large-Cap ETF saw declines, reflecting concerns about further escalation and potential retaliation 1. While U.S. officials are working to arrange a Trump-Xi call 20, near-term uncertainty remains elevated for sectors linked to China and global supply chains. The administration’s push for full domestic vehicle manufacturing also signals a further shift toward onshoring, with implications for automakers and suppliers 11.

Macro data provided some relief: April’s PCE inflation cooled to 2.1%, below forecasts, and core PCE matched expectations at 2.5% 2. Personal income growth was robust, and a record drop in imports sharply narrowed the trade deficit, helping the Atlanta Fed lift its Q2 GDP growth estimate to 3.8% 214. However, softer real spending and investment suggest consumers and businesses remain cautious 2. Jamie Dimon’s warning about possible bond market instability and readiness for 5% rates highlights the ongoing risk of volatility in fixed income, especially as deficits and inflation remain in focus 9.

In commodities, Brent crude dropped below $64 as OPEC+ prepares to debate a July output increase amid demand concerns 5. The Senate’s bipartisan push for sweeping new Russia sanctions and a 500% tariff on Russian oil buyers could further disrupt global energy flows if enacted 6. Meanwhile, the U.S. and E3 are preparing an IAEA resolution against Iran, adding to geopolitical risk in the Middle East energy complex 7.

Crypto and fintech activity continues to build. Trump Media’s $2.3B raise for a corporate Bitcoin treasury 13 and Stripe’s talks with banks on stablecoin integration point to growing institutional adoption of digital assets 12. Ulta Beauty stood out on the earnings front, surging after beating Q1 expectations and raising guidance, as consumer demand for prestige beauty remains resilient 10.

Traders should monitor late-session moves in China-exposed sectors, energy, and crypto, and watch for updates on U.S.-China talks 20, OPEC+ decisions 5, and Senate action on Russia sanctions 6. Defensive positioning and focus on strong domestic names may offer relative stability into the close.