TL;DR

Moody’s downgrades U.S.; Walmart raises prices on tariffs; Bitcoin hits record, ETF inflows surge.

Highlights

• Moody’s downgraded U.S. sovereign credit to Aa1, citing $36T debt and persistent deficits; U.S. loses last triple-A rating among major agencies 1.
• Walmart to raise prices in late May due to ongoing Trump tariffs; cost pressures confirmed by CFO and Treasury Secretary 2.
• Trump administration to set new tariff rates within weeks after 90-day pause; China imposes up to 74.9% anti-dumping duties on U.S./EU/Japan/Taiwan plastics 34.
• Nvidia to ship modified AI chips to China to comply with U.S. export controls; Apple faces U.S. scrutiny over planned Alibaba AI integration in China 56.
• Bitcoin hits record weekly close near $107,000; BlackRock and Fidelity drive Bitcoin ETF inflows to $41.5B 78.
• BlackRock launches $3B tokenized Treasury fund (sBUIDL) on Avalanche, expanding real-world asset tokenization in DeFi 15.
• U.S. households’ equity allocation reaches record 43.4%; retail buying streak at 21 weeks, hedge funds at peak leverage 14.
• ECB to cut deposit rate to 2% in June, then likely pause; policymakers cite U.S. tariffs as a risk 13.
• Israel launches major ground offensive in Gaza; Russia conducts record drone strike on Ukraine ahead of Trump-Putin-Zelenskyy ceasefire talks 101117.
• EU to impose 17th sanctions package targeting Russia’s oil “shadow fleet” in the Baltic Sea 12.
• FDA approves Novavax COVID vaccine for high-risk groups and Fujirebio’s Alzheimer’s blood test; U.S. House panel alleges Pfizer delayed vaccine data 91918.
• Capital One to pay $425M settlement over 360 Savings accounts post-Discover acquisition 16.

Commentary

Moody’s downgrade of U.S. sovereign credit removes the last triple-A rating, underscoring concerns about rising debt and fiscal deficits 1. While the immediate impact on Treasuries may be cushioned by the dollar’s reserve status, traders should monitor for upward pressure on yields and wider credit spreads, particularly as the U.S. approaches new tariff decisions and ongoing fiscal debates 13.

Trade policy remains a central risk. Walmart ’s planned price hikes in response to tariffs highlight persistent inflationary pressures in consumer staples 2. The Trump administration’s move to reset tariff rates, combined with China’s new anti-dumping duties on U.S. plastics, signals ongoing U.S.-China trade friction that could affect supply chains, retail margins, and sentiment in both equities and commodities 34.

U.S. equity markets are stretched, with record household allocations and a sustained retail buying streak, while hedge funds are heavily leveraged 14. This positioning increases sensitivity to any negative surprises, whether from credit markets, trade policy, or geopolitics. Small-cap and real estate funds continue to see outflows, even as large-cap inflows remain robust 14.

Crypto markets are strong, with Bitcoin setting new highs and institutional ETF inflows accelerating 78. BlackRock ’s launch of a tokenized Treasury fund on Avalanche marks further institutional adoption of blockchain-based assets 15. Meanwhile, gold demand remains firm, led by central bank accumulation, notably from China 14.

Geopolitical risks are elevated. Israel’s expanded ground offensive in Gaza and Russia’s record drone strike on Ukraine coincide with scheduled ceasefire talks involving Trump, Putin, and Zelenskyy 101117. The EU’s new sanctions on Russia’s oil fleet may disrupt energy flows 12. Traders should watch for headline-driven moves in energy, defense, and safe-haven assets.