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Israel and Iran traded deadly fire for a fifth consecutive day Tuesday as the conflict between the two countries showed no sign of abating. Donald Trump on Tuesday warned Iranian leader Ayatollah Ali Khamenei that he is an “easy target” and “our patience is wearing thin,” before demanding Tehran surrender in its escalating conflict with Israel. “We know exactly where the so-called ‘Supreme Leader’ is hiding,” Trump wrote on Truth Social. “He is an easy target, but is safe there - We are not going to take him out (kill!), at least not for now,” he wrote after declaring “total control” over Iran’s airspace. “But we don’t want missiles shot at civilians, or American soldiers. Our patience is wearing thin.” Trump in a subsequent post made clear what he does want from Iran, “UNCONDITIONAL SURRENDER!”

The Trump administration has insisted that the US is not directly involved in what Israel called a preemptive strike against Iran on Friday, which kicked off five days of missile fire between the two regional powers. But Trump’s latest comments suggest the US is now at least willing to threaten direct military intervention as it backs Israel’s effort to bring Tehran to heel. On Tuesday, Trump wrote in a post, “we now have complete and total control of the skies over Iran.” Meanwhile, the Pentagon simultaneously moved assets to the Middle East to strengthen the US military’s defensive capabilities and expand Trump’s options. Trump is considering whether to launch a military strike against Iran, current and former administration officials told NBC News. A strike by the United States is one option among a range that Trump is weighing after meeting with his top national security advisors in the Situation Room on Tuesday afternoon, the officials told NBC.

On Tuesday, Donald Trump left the Group of Seven summit in Canada a day early to manage America’s response to the war between Israel and Iran. However, he said he did not leave the G7 summit early to work on a ceasefire between Israel and Iran. In a post on his Truth Social platform, he said French President Emmanuel Macron was "wrong, whether purposely or not," when he earlier said Trump was returning to Washington to engage in ceasefire talks. "He has no idea why I am now on my way to Washington," Trump said. "But it certainly has nothing to do with a Cease Fire. Much bigger than that." Trump did not elaborate on his reasons for leaving, but he later told reporters he wanted “better than a ceasefire”, without elaborating on what he meant.

Military operations against Iran will continue regardless of the progress of any potential negotiations involving the US, an Israeli minister told Bloomberg. Speaking to the London-based Iranian International television channel, Prime Minister Benjamin Netanyahu said Israel had significantly damaged Iran’s nuclear and ballistic missiles programmes but that his forces still needed more time. He again hinted at regime change, saying the campaign was giving Iranians the chance to topple the Islamic Republic.

Market sentiment returned to ‘risk-off’ on Tuesday as hopes for an end to the hostilities in the Middle East dimmed. US and European stocks closed lower on Tuesday while bond yields dropped as the Israel-Iran conflict entered its fifth day and investors moved back into haven assets after a brief respite for riskier trades on Monday. The US dollar jumped the most in a month against a basket of its key trading partners. Gold rose closer to a new all-time high before profit taking set in. Gold prices have surged 30% so far in 2025, outpacing the Japanese yen, Swiss franc, and US Treasurys as the ultimate safe haven.

Oil prices rebounded after Donald Trump called for an immediate evacuation of Tehran. Brent crude futures, the international oil benchmark, rose as much as 2.1% in Singapore on Tuesday. Oil futures extended gains in US trading to settle 5% higher. Oil remains over 10% higher since the conflict began. Some analysts and strategists have said markets are currently not pricing the conflict as a major economic shock as long as it remains localised.

Fitch Ratings said “the fighting will remain contained between Israel and Iran and will not persist for more than a few weeks.” Similarly, Samy Chaar, chief economist and CIO Switzerland at Lombard Odier said the confrontation between the two countries looks very much controlled so far, despite “market jitters” in commodity prices. For now, he sees “no sign of an irreversible escalation.” “That said, even without an escalation in the conflict, lingering uncertainty and structurally higher energy costs retain the potential to slow economic growth and push inflation higher,” Chaar wrote in a Tuesday note.

In a joint statement published Tuesday, the G7 reiterated its commitment to "peace and stability in the Middle East". The statement said that Israel "has a right to defend itself", and that Iran "is the principal source of regional instability and terror". "Iran can never have a nuclear weapon," the statement said. "We urge that the resolution of the Iranian crisis leads to a broader de-escalation of hostilities in the Middle East, including a ceasefire in Gaza." The statement concluded, “we will remain vigilant to the implications for international energy markets and stand ready to coordinate, including with like-minded partners, to safeguard market stability.”

The joint statement agreed late on Monday came after a day of intense diplomacy in the Canadian mountain resort of Kananaskis, after Trump initially resisted signing up to the text and issued increasingly hawkish statements on the war, including a warning to evacuate Tehran.

China's embassy in Israel on Tuesday urged its citizens to leave the country "as soon as possible", as Israel and Iran continue to trade heavy strikes. "The Chinese mission in Israel reminds Chinese nationals to leave the country as soon as possible via land border crossings, on the precondition that they can guarantee their personal safety," the embassy said in a statement on WeChat. "It is recommended to depart in the direction of Jordan," it added. Beijing's embassy said on Tuesday the conflict was "continuing to escalate". "Much civilian infrastructure has been damaged, civilian casualties are on the rise, and the security situation is becoming more serious," it said.

President Xi Jinping said Tuesday China is “deeply worried” about the worsening Middle East tensions and added that Beijing is ready to play a constructive role in restoring peace and stability. China, which relies on the region for its energy supplies, is becoming increasingly concerned about stability there.

Tanker rates for vessels carrying refined oil products from the Middle East have surged due to the exchange of fire between Israel and Iran, making hauling fuel through the Strait of Hormuz more risky. The cost to ship fuels from the Middle East to East Asia climbed almost 20% in three sessions to Monday, while rates to East Africa jumped more than 40%. Tanker owners and managers had been pausing vessel offers in the Middle East as the hostilities between Israel and Iran show no signs of letting up. There haven’t yet been any major attacks on commercial shipping in the Persian Gulf, but the market is on edge. Major exporters in the region, such as Saudi Arabia and the United Arab Emirates, use the route to ship oil to international markets.

Trump and British Prime Minister Keir Starmer said on Monday they had finalized a trade deal reached between the two allies last month, making Britain the first country to agree to a deal for lower US tariffs. The agreement includes measures easing trade of cars, agricultural, and aerospace products, with UK auto exports seeing US tariffs slashed to 10% from 27.5% later in June on an annual quota of 100,000 vehicles. The deal falls short of an immediate cut to steel tariffs, with the US agreeing to exempt the UK up to a certain quota that has not yet been set, and the UK committing to meet American requirements on the security of steel and aluminium supply chains.

Meanwhile, Canada has yet to reach an agreement with the US. Mark Carney said in a statement he had agreed with Trump that their two nations should try to wrap up a new economic and security deal within 30 days. Trump said a new economic deal with host Canada was possible but stressed tariffs had to play a role, a position the Canadian government strongly opposes. “Our position is that we should have no tariffs on Canadian exports to the United States,” said Kirsten Hillman, Canada’s ambassador to Washington.

Donald Trump and Japanese Prime Minister Shigeru Ishiba also failed to reach an agreement on a trade package on the sidelines of the Group of Seven summit. “There are still some points on which the two sides are not on the same page, so we have not yet reached an agreement on the trade package,” Ishiba said to reporters on Monday in Calgary in between G-7 meetings. “We will continue to actively coordinate with the United States to reach an agreement that is beneficial for both countries, without sacrificing Japan’s national interests,” the premier said after the meeting.

Ahead of the bilateral meeting expectations for an announcement were fuelled by a series of discussions between the two parties. Ishiba and Trump spoke over the phone on three occasions, while Japan’s top negotiator Ryosei Akazawa traveled to Washington six times to meet his US counterparts in the weeks preceding the meeting.

As with other nations, Japan is subject to a 25% levy on cars and auto parts and a 50% tariff on steel and aluminium. A 10% across-the-board levy on other goods is set to rise to 24% in early July. Asked if the July deadline might be extended, Ishiba declined to comment. If the so-called reciprocal tariff rises to 24% from its current baseline 10%, that will shave about 2.2% off from Japan’s projected real GDP by 2029, a May report by the Daiwa Institute of Research said.

There is a particular focus on auto tariffs, which Trump has threatened to hike even further. The auto industry is crucial to the Japanese economy, employing some 5.6 million people, about 8.3% of the country’s workforce, and generating around 10% of GDP, according to the Japan Automobile Manufacturers Association. Major automakers including Toyota Motor, Honda Motor, Mazda Motor and Subaru are bracing for a collective hit of more than US$19 billion this fiscal year alone from the tariffs. “For Japan, automobiles are truly a matter of national interest. We will do whatever it takes to protect that,” Ishiba told reporters.

Leading up to the summit, local media reported a vast array of potential concessions that Japan was suggesting in a bid to close the trade gap with the US, ranging from importing more soy from the US to cooperation on shipbuilding. Tokyo has also tried to reason with the US by citing its standing as the leading investor to the US as leverage, saying the tariffs would negatively impact Japan’s capability to invest in the US by cutting into its domestic economy. Japan’s cumulative foreign direct investment into the US stood at US$783 billion at the end of 2023 and Ishiba pledged to boost Japan’s overall investment in the US to US$1 trillion during his summit with Trump in February. In return for pledges of investment, Ishiba and Akazawa had consistently pushed for a full removal of all tariffs imposed by the US.

A poll conducted last month by the Mainichi newspaper found that 62% of respondents preferred having the government stick with its position rather than jumping into an agreement. Ishiba has seen a bump in his ratings recently thanks in part to Agriculture Minister Shinjiro Koizumi taking on rising rice prices, an issue emblematic of how inflation is hitting households. His approval ratings rose 5 percentage points to 38%, according to a poll conducted over the weekend by broadcaster FNN. The leader of Japan’s largest opposition party is weighing whether to file a no-confidence motion against the prime minister after the trade talks, according to public broadcaster NHK.

The EU has refused to hold a flagship economic meeting with Beijing ahead of a leaders’ summit next month because of a lack of progress on numerous trade disputes, according to a Financial Times report Tuesday. The bloc’s stonewalling of the talks, known as the EU-China High-Level Economic and Trade Dialogue, underlines the deep divisions between the sides despite Beijing’s efforts to court Europe as a counterweight to the US amid President Donald Trump’s tariff war. The economic dialogue often serves to lay groundwork for the EU-China leaders’ summit, which was this year set for July 24-25 in Beijing. The leaders’ summit this year has particular diplomatic significance, marking 50 years of bilateral relations.

The EU and China are locked into a growing number of trade disputes. Brussels last year imposed tariffs on Chinese electric vehicles after it found the industry benefited from huge state subsidies. In response, China imposed anti-dumping duties on EU brandy and opened anti-subsidy investigations into pork and some dairy products, which could lead to further tariffs. In recent weeks, the EU has banned Chinese medical devices from most public procurement contracts and placed anti-dumping duties on Chinese hardwood plywood, a construction material.

Annual food inflation in New Zealand accelerated to 4.4% in May, rising from 3.7% in April and reaching its highest level since December 2023. The continued uptick in food prices put further pressure on household budgets with the grocery and meat, poultry and fish groups leading the increase, up 5.2% and 5.4%, respectively. All five major food categories saw price increases compared to the same month last year. Policymakers will be watching closely, as sustained inflation could influence future decisions on interest rates. On a monthly basis, overall food prices 0.5% in May, following a 0.8% rise in April.

Japan’s central bank on Tuesday said it would slow the pace of government bond purchases from April next year, after volatility in government debt rippled across the world, while it also held its benchmark rate at 0.5% amid rising growth risks. The Bank of Japan (BoJ), whose rate decision was in line with expectations from economists polled by Reuters, reiterated it would continue reducing its monthly purchases of Japanese government bonds by about 400 billion yen (US$2.76bn) per quarter to about 3 trillion yen until March 2026, as outlined in its plan last year and signalling a measured but steady path away from ultra-loose monetary policy. It will then slow the cuts to 200 billion yen per quarter from April 2026 to March 2027. The central bank will conduct another interim assessment at its June 2026 monetary policy meeting. Despite the cutbacks, it’s still determined to reduce its footprint in the bond market. In that sense, the BOJ remains firmly on a path of normalization.

Policymakers remain cautious, closely monitoring the inflationary effects of elevated oil prices and seeking clarity on evolving US trade policy. Last week, BOJ Governor Kazuo Ueda told Japan’s parliament that the central bank will continue to raise rates “once we have more conviction that underlying inflation will approach 2% or hover around that level.” Japan’s economy faces growth uncertainty while inflation has run above the BOJ’s target for around three years. Inflation in the country has remained high, partly due to a rice shortage, with rice prices shooting up close to 100% and Japan’s government releasing emergency stockpiles.

The country’s headline inflation rate for April came in higher than expected at 3.5%, marking more than three years that inflation has run above the BOJ’s 2% target. Japan’s GDP also shrunk 0.2% in the quarter ended March compared to the preceding period as exports declined, marking the first time in a year that the economy contracted on a quarter-on-quarter basis.

South Korea will introduce a second supplementary budget on Thursday to support its slowing economy, following a 13.8 trillion won (US$10.13 billion) package passed in May. The new package aims to aid livelihood issues amid the threat of US tariffs and weak consumer demand. President Lee Jae-myung, who took office on June 4, advocates expansionary fiscal policy and direct handouts to stimulate spending. The central bank recently cut its 2024 growth forecast to 0.8% from 1.5%. Acting Finance Minister Lee Hyoung-il said the budget will include measures to curb rising food prices. The government also extended oil tax breaks through August due to surging global prices linked to Middle East tensions. Additional efforts include import quota hikes and financial support to tame food inflation, which Lee said is causing “too much pain.” Tax cuts on car purchases were also extended through to the year-end to boost the auto sector.

South Korea's export prices dropped 2.4% year-on-year in May, reversing from a 0.4% increase the previous month and ending a 16-month streak of annual growth. The decline was driven by a downturn in manufactured goods prices, which fell 2.4% after rising 0.4% in April, while growth in agricultural, forestry, and marine product prices slowed to 6.9% from 9.4%. On a monthly basis, export prices fell 3.4%, following a 1.5% drop in April, largely due to the Korean won’s appreciation.

South Korea's import prices fell 5% year-on-year in May 2025, widening from a 2.6% decline in the previous month. The drop was primarily driven by lower global oil prices and the appreciation of the Korean won. Prices for raw materials plunged 14.1%, accelerating from a 12% fall in April. On a monthly basis, import prices fell 2.3% in May, extending a streak of four consecutive monthly declines, in line with the global downturn in oil prices.

Hong Kong’s seasonally adjusted unemployment rate inched up to 3.5% in the three months ending May, from 3.4% in the previous period, hitting its highest level since December 2022. The increase was driven by continued industry adjustments amid external uncertainties and changing consumption patterns. The number of unemployed people rose by 6,400 to 135,800, while total employment dropped by 12,400 to 3.66 million. Unemployment increased across most major sectors, with sharper rises in construction, retail, and real estate. The youth unemployment rate (ages 20–29) remained unchanged at 6.5% in May. Meanwhile, the labour force participation rate edged down to 56.7% from 56.8%. The data, which is the result of a phone survey, comes before the arrival of fresh graduates and school leavers which could put further pressure on the job market.

Singapore’s non-oil domestic exports (NODX) unexpectedly fell 3.5% in May compared to the same period last year, missing the 8% growth forecast by economists polled by Reuters. The latest reading compares with 12.4% growth in the previous month, government data on Tuesday showed. This marked the first decline in non-oil domestic exports since January and the strongest contraction since October 2024, amid the imposition of new US tariffs, with exports to the US plunging 20.6%. Exports also declined to Thailand (-17.0%), Malaysia (-7.6%), Japan (-7.4%), China (-3.0%), and the EU (-4.8%) while soaring to Taiwan (17.25%). Electronic product shipments grew by 1.7%, easing sharply from a 23.4% surge in April, while non-electronic exports fell by 5.3%, reversing a 9.3% rise in April. On a month-on-month basis, Singapore’s NODX tumbled 12.0% in May, the steepest decline since May 2023, compared to a 10.4% increase seen in April.

The central bank of Pakistan kept its key interest rate steady at 11% during its monetary policy meeting yesterday, in line with expectations, after a surprise 100 bps cut in its May meeting. The bank’s Monetary Policy Committee (MPC) said in a statement announcing the decision that it expected some near-term volatility in inflation, which is projected to gradually edge up and stabilize within the 5–7% target range. “This outlook, however, remains subject to multiple risks emanating from potential supply-chain disruptions from regional geopolitical conflicts, volatility in oil and other commodity prices, and the timing and magnitude of domestic energy price adjustments,” the MPC said. Headline inflation rose to a five-month high of 3.5% in May, up from a near six-decade low of 0.3% in April, exceeding the finance ministry’s projection of 1.5%–2%.

US consumer spending reiterated more than expected in May. Retail sales in the US declined 0.9% month-over-month in May, following a downwardly revised 0.1% drop in April and worse than forecasts of a 0.7% fall. It is the biggest decrease in four months, as consumers scaled back their purchases ahead of the expected tariffs. Sales at motor vehicle & parts dealers recorded the largest decline (-3.5%). Sales excluding food services, auto dealers, building materials stores and gasoline stations, which are used to calculate GDP, were up 0.4%, above forecasts of 0.3% and a 0.1% fall in April. Sales rose 3.3% from a year ago.

The pullback in retail sales came despite surveys showing that consumer sentiment actually increased in May. “The economy is slowing with consumers nervous about exactly what lies ahead and are choosing to save overall rather than flash some cash at the shops and malls,” said Chris Rupkey, Fwdbonds chief economist.

Industrial production in the US fell 0.2% in May, missing market expectations of a 0.1% rise and after increasing 0.1% in April. Manufacturing output, which accounts for 78% of total industrial production, ticked up 0.1%, less than forecasts of 0.2%. Meanwhile, mining increased 0.1%, and utilities output decreased 2.9%. Capacity utilization moved down to 77.4%, a rate that is 2.2 percentage points below its long-run (1972–2024) average.

Homebuilder sentiment in the US has neared a pandemic low as economic uncertainty plagues consumers. The NAHB/Wells Fargo Housing Market Index in the US fell two points to 32 in June, the lowest since December 2022, and contrasting with market expectations that it would rebound to 36 given recent tariff negotiations and pullbacks by the Trump administration. Anything below 50 is considered negative. This index has only seen a lower reading than June’s level twice since 2012. The current sales conditions fell two points to 35, and sales expectations for the next six months fell two points to 40.

“Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty,” said Buddy Hughes, NAHB chairman and a homebuilder from Lexington, North Carolina, in a release. “To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices.”

Mitsubishi’s biggest-ever acquisition appears to be in the pipeline. The Japanese conglomerate is said to be in advanced talks to buy the assets of Aethon Energy Management, which includes natural gas operations, for close to US$8 billion. It would be the Japanese conglomerate's biggest ever acquisition. The deal would likely involve a purchase of Aethon's portfolio, including natural gas production operations and midstream assets, and could be announced in the next couple of months, Bloomberg reported. The acquisition would allow Mitsubishi to double down on its natural gas business, which has been profitable, and would be a strategic move given Japan's expected increase in power demand over the next decade. UAE oil giant Adnoc, which just struck an US$18.7 billion deal with Australia’s Santos, had also been considering a potential transaction involving Aethon.

Asia-Pacific markets were mixed Tuesday, as investors hoped that the Israel-Iran conflict might remain contained with Tehran reportedly signalling readiness to negotiate. Investors also considered the Bank of Japan’s decision to leave interest rates unchanged at 0.5% in the face of an uncertain trade climate, following its two-day monetary policy meeting which concluded yesterday. The central bank also said it would slow the pace of government bond purchases from next April. Japan’s Nikkei 225 added 0.6% to close at 38,537.

Japan’s SoftBank raised US$4.8 billion from a sale of 21.5 million T-Mobile shares at $224 each, a move that will help fund its AI plans. SoftBank is ramping up investments aimed at making AI reasoning superior to humans’. The final price of the block trade was around a 3% discount to T-Mobile’s closing price on Monday of $230.99. SoftBank will remain T-Mobile’s second largest shareholder after the stock sale, behind Deutsche Telekom which is the US company’s biggest investor. Shares of Softbank rose 2.1% in Tokyo.

Yields on Japanese Government Bonds (JGBs) ticked up Tuesday after the Bank of Japan said it would slow the pace of government bond purchases starting next April. The yield on 10-year JGBs moved up 3 bps to 1.48%.

In South Korea, the Kospi index advanced 0.1% to its highest level in almost three years and extended gains from the previous session as investors remained optimistic about new policy directions under South Korea’s new presidential administration. The index is now up 23% for the year, making it Asia’s best-performing equity benchmark, and South Korea’s stock market value has regained the US$2 trillion mark. The index is about 10% away from a record high set in 2021.

Shares of Samsung Electronics jumped 1.6% following reports that it has plans to develop a hub for users to share health data directly with doctors in between visits. During appointments, doctors often share recommendations or fitness suggestions, but it’s not always easy to remember the guidance. In an interview with Bloomberg TV, Samsung health executive Dr. Hon Pak said the company is working on tools to cut down that disconnect, port data collected on watches into a central location and nudge users to stay on top of goals provided by doctors. Health tracking is already a key selling point of smartphones and watches, with Samsung, Apple and Google using the features to attract and retain customers.

Shares in South Korea’s SK Hynix rose 0.4% to hit a more than 2-decade high on Tuesday. The company’s parent, SK Group, reportedly plans to build the country’s largest AI data centre in partnership with Amazon Web Services in Ulsan. SK Hynix shares have surged almost 50% so far this year on the back of an AI boom.

In Australia, the S&P/ASX 200 benchmark was down 0.1%. Investors are eyeing upcoming labour data this week, expected to offer fresh signals on the strength of the Australian economy and shape expectations for the RBA’s next policy moves.

In India, the BSE Sensex Index dropped 0.3%, to 81,583, halting gains from the previous session. The Sensex tracked a decline in US stock futures after Donald Trump called for the evacuation of Tehran amid rising tensions between Israel and Iran.

Chinese shares were down modestly on Thursday. Mainland China’s CSI 300 index fell 0.1% to 3,870. Shanghai will kick off its annual two-day Lujiazui financial forum today, in which top financial officials said new policies would be unveiled to bolster economic growth and push for reforms in the financial industry.

Hong Kong’s Hang Seng Index slipped 81 points, or 0.3%, to 23,980. The Hang Seng Tech Index dropped 0.2%. Caution prevailed ahead of the Fed’s two-day policy meeting which started yesterday, with a rate decision due in the early hours of tomorrow morning Hong Kong time. Sentiment was also hurt by a draft G7 statement indicating plans to strengthen critical mineral supply chains in response to China’s export controls.

China’s biggest soy sauce maker raised US$1.3 billion after upsizing its Hong Kong listing. Foshan Haitian, which already trades in Shanghai, sold 279 million shares at the top end of the marketed price range, according to terms seen by Bloomberg News. Investors expressed interest for multiple times the shares available when it started taking orders last week. Foshan Haitian’s deal would be among the largest listings in Hong Kong this year, and the new shares are due to start trading Thursday.

European stocks were broadly in negative territory Tuesday. The pan-European Stoxx 600 closed 0.9% lower, hitting its lowest level in more than three weeks. Unlike falls in previous days of the conflict, the decline was felt across all index sectors in a broad “risk-off” move. The index had gained 0.4% on Monday, as global markets appeared to shrug off the impact of the escalating conflict between Israel and Iran. Meanwhile, Israel’s Tel Aviv 35 index hit an all-time high.

The announcement late Monday that the UK and US have signed off on a previously announced trade deal, did little to lift market sentiment on Tuesday. The FTSE 100 fell 0.5%. Firms that could stand to benefit from the lower tariff rates on autos and zero tariffs on aerospace parts were little changed. Aston Martin Lagonda fell 1.2%, while Rolls-Royce was up 0.6%, with the impact largely already priced in.

On the economic front, the ZEW Indicator of Economic Sentiment for the Eurozone surged by 23.7 points from the prior month to 35.3 in June 2025, well above expectations of 23.5. In June, about 49.7% of the surveyed analysts expected no changes in economic activity, 42.8% saw an improvement and 7.5% anticipated a deterioration. In the meantime, the indicator of the current economic situation increased by 11.7 points to -30.7 and inflation expectations rose by 3.4 points to -14.7.

US stocks fell Tuesday and oil surged after a fifth day of strikes between Israel and Iran and Trump’s call for the evacuation of Tehran. Donald Trump demanded Iran’s “unconditional surrender” and directly threatened Supreme Leader Ayatollah Ali Khamenei, calling him “an easy target” in a series of social media posts. Fresh retail sales data also weighed on stocks Tuesday, as consumer spending retreated more than expected in May. Sales dipped 0.9% on the month, worse than the Dow Jones forecast for a 0.6% fall.

The S&P 500 shed 0.8% to end at 5,983. The Dow lost 299 points, or 0.7%, to close at 42,216. The Nasdaq Composite fell 0.9% and settled at 19,521.

The broader market was weighed down on Tuesday by megacap technology stocks. Every member of the Magnificent Seven traded down. Tesla led the slide with a drop of almost 4%

T-Mobile fell 4.1% after SoftBank sold 21.5 million of the telecom operator’s shares at a discount to yesterday’s closing price. Softbank will use the proceeds to help fund its investments in AI.

Yields on US Treasuries fell on Tuesday. The 10-year Treasury yield dropped 6 bps to 4.39%. Yields on the two-year fell 2 bps to 3.94%.

The US Dollar Index jumped 0.7% to 98.78. That was the biggest increase in a month.

The Japanese yen initially appreciated after the Bank of Japan said it would slow the pace of government bond purchases starting next April. But the yen relinquished gains in the face of the strong dollar to end the day 0.4% lower at ¥145.24.

The offshore yuan traded around Rmb 7.19 per dollar on Tuesday, remaining in a tight range as investors monitored ongoing geopolitical tensions. The People’s Bank of China set the daily yuan midpoint at Rmb 7.1746, its strongest bias since March. The fix underscored Beijing’s commitment to exchange rate stability ahead of its upcoming policy meeting on Friday.

US importers are increasingly being asked by their foreign counterparties to settle transactions in currencies other than the US dollar, such as euros, Chinese renminbi, Mexican pesos, and Canadian dollars. The dollar’s volatility, including an 8% decline this year against a basket of other currencies, is driving this trend as foreign vendors seek to limit their exposure to further swings in the greenback. “In markets from East Asia to Latin America, a growing number of exporters are opting to denominate contracts in euro, yuan, or even local currencies,” said Karl Schamotta, chief market strategist at cross-border payments firm Corpay in Toronto.

Gold rose 0.1% to $3,388 per ounce on Tuesday as ongoing tensions in the Middle East boosted demand for safe-haven assets. On Monday, bullion dropped 1.4%, marking its largest one-day fall in a month, amid reports that Iran is seeking to de-escalate hostilities with Israel and is willing to resume nuclear talks with the US as long as Washington doesn’t join the Israeli attacks.

Silver futures hit a high of $37.33 Tuesday, reaching the highest level since February 29, 2012. Demand for silver has been on the rise as the metal became a critical vehicle in the global shift toward green energy and tech innovation.

Oil extended gains from Monday as investors weighed the odds of a resolution in the Israel-Iran conflict after Donald Trump left the Group of Seven summit a day earlier than expected. Prior to his departure, he had urged everyone to evacuate Tehran in a post on social media platform Truth Social. Two tankers collided and caught fire in waters off the United Arab Emirates, further rattling global oil and shipping markets. The incident was “navigational” and “unrelated to the current regional conflict,” one of the tanker’s owners said. Brent Crude rose 5.0% to $76.90 a barrel.

US crude oil inventories fell by 10.133 million barrels in the week ending June 13, 2025, marking the largest draw since July 2023, according to the American Petroleum Institute. The sharp decline surprised markets, which had expected a much smaller 0.6 million-barrel decrease, and followed a modest 0.37 million-barrel drop the previous week.

Bitcoin fell 4.0% on Tuesday to trade around $104,300.

One of the most popular and riskiest crypto products in the world, currently off-limits to Americans, could soon be allowed in the US thanks in part to a more crypto-friendly White House. Perpetual crypto futures, contracts with no expiration that allow traders to speculate on token prices around the clock, have been at the “heart and soul” of the market over the past decade, according to Kaiko analyst Adam McCarthy. However, they are not yet approved in the US. If perps are permitted, as hinted at recently by a key US regulator, they will probably feed the growing appetite for speculative trading tools. The market, dominated by Binance, has already been on a tear. Monthly volumes jumped from US$35 billion in 2018 to US$6.4 trillion in May this year.

Under Trump, the US has quashed cases against crypto firms, established a strategic Bitcoin reserve, and propelled stablecoin legislation in the Senate. On Monday, Trump Media filed to launch an ETF that would invest directly in Bitcoin and Ether.

On Wednesday’s “Peter Lewis’ Money Talk” podcast, I’ll be joined by Richard Harris, Chief Executive Officer at Port Shelter Investment Management and Marc Franklin, Managing Director and Senior Portfolio Manager of Multi Asset Solutions at Manulife Investment. With a view from Japan is Dan Kerrigan, CEO of Interactive Brokers Securities Japan.

The podcast is also available on Apple Podcasts, YouTube Studio and Spotify.

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