TL;DR

Trump doubles tariffs, global markets fall; US-China trade tensions escalate; Fed, ECB signal rate shifts.

Highlights

• Trump doubles tariffs on steel and aluminum imports to 50% (effective June 4), sending US and global equity futures lower; S&P 500 futures -0.4%, Nasdaq -0.5%, Dow -150 pts, VIX higher 118.
• US-China trade tensions escalate: China rejects US claims of Geneva deal breach, warns of "forceful measures"; Trump-Xi call expected this week to address critical minerals and tariff disputes 23.
• Fed’s Waller signals possible 2025 rate cuts if inflation and tariffs stabilize; ECB expected to cut deposit rate to 2% on June 5 7.
• Morgan Stanley projects US Dollar Index to fall 9% to 91 by mid-2026 on 175bp Fed cuts; DXY already down nearly 9% YTD 8.
• Commodities: Iron ore drops below $95/ton, oil rises to $61.89/bbl (OPEC+ output hike), gold up 1.9% to $3,312/oz 118.
• Airline sector outlook cut: IATA trims 2025 profit forecast to $36B on trade frictions and aircraft delivery delays 13.
• Russia-Ukraine conflict intensifies; North Korea confirmed to have sent troops and munitions to Russia; Istanbul peace talks set to begin 617.
• White House pauses new Iran sanctions; Iran demands guarantees on sanctions relief as uranium enrichment hits 60% 45.
• Sanofi to acquire Blueprint Medicines for up to $9.5B (27% premium); Bristol Myers and BioNTech announce $11.1B cancer drug partnership 910.
• Apple appeals EU DMA interoperability order, citing privacy risks and $570M fine 11.
• OpenAI acquires Jony Ive’s AI startup for $6.5B; Meta to automate Facebook/Instagram ad creation via AI by 2026 1216.
• MicroStrategy adds 705 bitcoin ($75.1M) to holdings; BitoPro crypto exchange reportedly exploited for $11.5M 1415.

Commentary

US equity futures are under pressure after President Trump’s move to double tariffs on steel and aluminum, with broad declines in global markets and a notable uptick in volatility (VIX ) 118. The tariff escalation has reignited trade tensions with China, which is threatening countermeasures and rejecting US accusations of breaching the recent Geneva trade agreement 23. A scheduled Trump-Xi call later this week is in focus, but the risk of further retaliation and supply chain disruptions is likely to keep risk assets on the defensive in the near term 2.

Central bank policy is another key driver. Fed Governor Waller’s comments suggest rate cuts are possible in 2025 if inflation and tariff effects remain manageable, but the inflation outlook is clouded by trade uncertainty 7. The ECB is widely expected to cut its deposit rate to 2% this week, reinforcing a policy divergence that, along with expectations for Fed easing, has contributed to a weaker dollar. Morgan Stanley and other banks see more downside for the DXY, with safe-haven flows supporting the euro, yen, and gold 87.

Commodities are reacting to both macro and sector-specific news: iron ore is down on trade war fears, oil is higher after an OPEC+ production hike, and gold is catching a bid on safe-haven demand 118. Airlines face additional headwinds, with IATA cutting its 2025 profit outlook due to trade frictions and ongoing aircraft delivery delays from Boeing and Airbus 13.

In corporate news, healthcare M&A remains active with Sanofi’s $9.5B acquisition of Blueprint Medicines and a major $11.1B cancer drug partnership between Bristol Myers and BioNTech 910. Regulatory and tech headlines are also notable: Apple is contesting EU interoperability mandates, OpenAI is moving into hardware with its $6.5B acquisition of Jony Ive’s AI startup, and Meta’s AI ad automation plans are pressuring traditional ad agencies 111216. In crypto, MicroStrategy continues to accumulate bitcoin , while security risks persist with another major exchange hack reported in Asia 1415.