The US dollar is closing the day higher versus the major currencies. The biggest mover is versus the British pound with a gain of 0.55%. The dollar rose the same versus the New Zealand dollar and by 0.47% versus the Australian dollar. The greenback was little changed versus the Canadian dollar with a gain of 0.05%. The US dollar is closing near highs for the day versus the GBP, JPY, CHF and the NZD.
The greenback was supported by President Trump’s 30% tariff threats on the EU and Mexico. Both are looking to negotiate the rates down.
In other news, Cleveland Fed president Beth Hammack emphasized the need for policy patience, saying recent inflation readings show “modest progress” but don’t justify an immediate rate cut. She noted that the labor market remains resilient, and the Fed is watching closely how tariffs feed through to core inflation. Markets trimmed rate cut expectations slightly following her remarks.
NEC Director Kevin Hassett, speaking on CNBC, defended the administration’s tariff strategy, stating that talks for trade deals are ongoing and the president is focused on what’s best for the country. He argued that import prices are falling despite tariffs, attributing the shift to growing patriotism among consumers choosing U.S.-made products. Hassett cited several national emergencies—drug flows from Mexico, trade deficits with the EU, and Brazil transshipping Chinese goods—as justification for recent tariffs. He also criticized the Federal Reserve, saying it has been “very wrong” about the inflationary impact of tariffs, and predicted that domestic production will reduce price pressures. Finally, he noted that the correlation between U.S. and European interest rates has broken down, signaling a shift in global monetary dynamics.
Speaking from the White House, President Trump expressed strong dissatisfaction with Russia and issued a clear ultimatum: if a peace deal is not reached within 50 days, the U.S. will impose 100% tariffs on Russian goods along with secondary tariffs on countries that continue to buy Russian oil. While direct trade with Russia is minimal, Trump emphasized that the secondary tariffs would be “biting” and are intended to discourage global commerce with Moscow. He announced a new defense arrangement with Ukraine, under which Ukraine will manufacture and pay for advanced weapons, including Patriot missile systems, to be coordinated through NATO. Trump also said billions in military equipment will be rapidly deployed and framed the strategy as a means to end the war through economic pressure and strong alliances. He praised European nations for stepping up and confirmed the EU will soon visit Washington to discuss broader trade issues. Confident that Putin knows what a fair deal looks like, Trump reiterated that the war must end, and a resolution is on the horizon.
Crude oil futures settled at $66.98, down $1.47 or 2.15% on the day, as sellers regained control following a decisive technical breakdown. After briefly rising to a multi-week high of $69.61, the price reversed sharply, falling below the 200-day moving average at $68.33, which had been a key battleground last week. The decline accelerated as the price also fell below the 100- and 200-hour moving averages at $67.97 and $67.37, respectively. The breakdown across these major technical levels shifts the short-term bias back in favor of sellers and puts buyers on the defensive.
European equities closed the day mixed, with standout strength in the UK. The FTSE 100 rose 0.64% to a new record close of 8998.07, briefly touching an intraday high of 8999.22. Meanwhile, Germany’s DAX fell 0.36% and France’s CAC slipped 0.27%, dragging down broader sentiment. Gains were modest elsewhere, with Spain’s IBEX up 0.19% and Italy’s FTSE MIB rising 0.27%.
In the bond market, 10-year yields in Europe also mixed: German bunds rose 3.9 bps, French yields up 0.6 bps, Spanish and Italian yields edged slightly higher, while UK gilt yields declined 3.5 bps to 4.595%, reflecting diverging rate expectations across the region.
In the US debt market, yields are ending mixed with the short end marginally lower while the longer end was marginally higher.
- 2-year yield 3.902%, -1.2 basis points
- 5-year yield 3.988%, -0.3 basis points
- 10 year yield 4.433%, +1.0 basis points.
- 30 year yield 4.975%, +1.8 basis points
Bitcoin hit a new record high of $123,236, but has rotated back to the downside and trades near the lows for the day at $118,972. The price is currently trading at $119,766 up $644 or 0.54%. The price is up over 20% for the year.
US stocks moved modestly higher with the NASDAQ index up 0.26% and the small-cap Russell 2000 up 0.53%. Meta shares are up 0.40% at $720.28 but well off highs at $728. Meta CEO Mark Zuckerberg announced that the company plans to invest hundreds of billions of dollars into computing infrastructure to develop superintelligence, leveraging Meta’s strong business capital to fund the ambitious effort. The initiative includes building out Hyperion, a computing project capable of scaling to 5 gigawatts over several years, and establishing Meta Super Intelligence Labs, which will offer industry-leading compute capacity and the highest compute-per-researcher ratio. Zuckerberg emphasized Meta’s commitment to assembling the most elite and talent-dense team in the industry. The company is also constructing several massive AI compute clusters, starting with “Prometheus,” which is expected to go online in 2026, followed by additional advanced “Titaned” clusters. Meta is going all in and spending a boat load of money in doing so.
Looking at the closing levels for the major indices, the NASDAQ index closed at a record high:
- Dow industrial average rose 88.14 points or 0.20% at 44459.65.
- S&P index rose 8.81 points or 0.14% at 6268.56
- NASDAQ index rose 54.80 points or 0.27% at 20640.33.
The small-cap Russell 2000 gained 14.90 points or 0.67% at 2249.72.
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