Good morning. June opens with a flurry of global crosscurrents—from tensions between the U.S. and China, to signs the Fed may have room to cut rates, to new headlines out of Ukraine and OPEC. While headline PCE inflation moved closer to the Fed's 2% target in April, policy uncertainty remains high. Trump’s tariff strategy faces legal challenges and political scrutiny, while a new flare-up in U.S.-China trade talks adds to market jitters. On the macro side, oil prices jumped despite an OPEC+ decision to increase production, gold gave back recent gains, and bond yields ended May with their biggest monthly gain since 2024.

As Congress returns, attention also shifts to potential changes in the Republican mega-bill and to corporate earnings from Campbell Soup (CPB) later today. Markets are holding onto much of May’s gains, but face a test this week from economic data, Fed speakers, and geopolitical friction.

Ukraine Claims Deep Strike Inside Russia
Ukrainian drones reportedly destroyed several warplanes at an airbase inside Russia’s Saratov region, highlighting rising capabilities and risks in the broader conflict.
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Fed’s Waller Opens Door to Rate Cuts
Fed Governor Christopher Waller said the central bank could cut rates multiple times this year if inflation continues to cool, citing encouraging trends in recent data.
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Could UAE Break from OPEC?
As the group prepares to decide on July output, The Economist explores whether the UAE might challenge Saudi dominance and alter the balance of oil markets.
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Senate Eyes Changes to GOP Tax Bill
As lawmakers return, MarketWatch breaks down key provisions of the Republican mega-bill and where Senate negotiations may shift the outcome.
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Goldman Sees S&P 500 Upside
Despite rising bond yields, Goldman Sachs maintains a bullish view on stocks, citing healthy earnings growth and softening inflation.
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China Blames U.S. for Trade Breakdown
Beijing pushed back against accusations from President Trump, stating the U.S. has undermined the Geneva trade deal through unilateral sanctions.
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Private Credit Ratings Face Scrutiny
Bloomberg details how the rise of private credit and boutique raters like Egan-Jones is drawing SEC and Wall Street attention.
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Markets closed out a strong week on a flat note. The S&P 500 was little changed Friday, with investors digesting trade headlines and softer-than-expected inflation data. President Trump accused China of violating its trade agreement, while negotiations reportedly stalled. Still, PCE inflation came in below expectations, with the Fed’s preferred measure dropping to 2.1% y/y. Core PCE fell to 2.5%, and personal income rose more than forecast. Bond yields fell, the dollar firmed, and oil and gold both slipped. For May, the S&P 500 gained 6.15%—its best May since 1990—while the Nasdaq posted a 9.56% surge.

Markets begin June with major questions on rate policy, global trade, and growth. With inflation softening and labor markets stable, the Fed may have room to cut—but Trump’s trade strategy and geopolitical risks could quickly shift that outlook. We expect market volatility to remain elevated, with Fed speak and global headlines setting the tone.