TL;DR

Senate passes $3.3T Trump tax bill; Fed holds rates; Tesla drops 7% on subsidy risk.

Highlights

• Senate passes Trump’s $3.3T tax-cut and spending bill (51-50); bill returns to House, with major deficit impact and cuts to Medicaid, food aid, and clean energy.1
• Fed Chair Powell holds rates steady, resists White House pressure for cuts; cites tariff risks and strong labor market.2
• U.S. May job openings rise to 7.77M, highest since November; hiring slows, quits and layoffs remain subdued.3
• Tesla drops 7% after Trump-Musk dispute raises risk to federal subsidies; Musk threatens political opposition.4
• BofA reports largest U.S. equity fund outflows in 10 weeks, led by mid- and small-cap selling; flows shift to bonds and money markets.5
• SEC approves Grayscale’s first multi-asset spot crypto ETF; agency also explores faster token ETF listing process.1015
• Apple extends rally, breaks above 50-day moving average, hits six-week high.12
• Trump signals intent to refill Strategic Petroleum Reserve when oil prices fall; no timeline set.6
• Geopolitical risks: Israel intercepts Houthi missile; Iran cuts off IAEA contact; Iraq loses 15% power capacity due to reduced Iranian gas.7814
• Germany to fund 500 long-range drones for Ukraine; Putin and Macron resume direct talks on Ukraine and Iran.1819
• U.S. Treasury sanctions Russia-based Aeza Group for ransomware hosting, targeting crypto-linked payments.17
• Warner Bros. Discovery falls 4% after Newhouse family sells $1.1B stake; VusionGroup drops after Walmart share sale.20

Commentary

Heading into the close, U.S. markets are digesting a mix of fiscal, monetary, and geopolitical developments. The Senate’s narrow passage of Trump’s $3.3 trillion tax-cut and spending bill sets up a closely watched House vote, with the potential for significant deficit expansion and major changes to social and energy programs.1 The prospect of extended tax cuts could provide near-term support for equities, but the scale of deficit spending and cuts to social safety nets may weigh on longer-term sentiment and Treasury yields, especially if the House outcome is uncertain.1

The Federal Reserve remains on hold, with Chair Powell emphasizing a cautious, data-driven approach amid tariff uncertainty and a still-resilient labor market.23 May’s job openings surprised to the upside, complicating the case for imminent rate cuts.3 This backdrop, combined with outflows from U.S. equities—especially mid- and small-caps—and rising inflows to bonds and money markets, suggests investors are rotating away from risk and positioning defensively ahead of key policy events and data.5

In single-stock action, Tesla slumped 7% as political tensions between Trump and Musk raised the threat of lost federal subsidies, adding to concerns about slowing global sales.4 Apple , meanwhile, extended its technical rebound, supporting large-cap tech sentiment.12 In the crypto space, the SEC’s approval of a multi-asset spot ETF and efforts to streamline token ETF listings point to further integration of digital assets with traditional markets, which could drive additional flows into crypto-related equities.1015

Geopolitical risks remain elevated, with new missile attacks in the Middle East7, Iran’s nuclear opacity8, and energy disruptions in Iraq14. These developments may add to volatility in energy and defense sectors. Elsewhere, large block sales weighed on Warner Bros. Discovery and VusionGroup , highlighting ongoing sector-specific pressures.20

Traders should monitor the House tax bill vote1, Fed commentary2, and sector rotation patterns5, while keeping an eye on further regulatory and geopolitical headlines78141819 that could drive late-session moves.