Good morning. Markets are continuing to take heart from President Trump’s easing up on threats against trading partners and the Fed, giving investors hope that the White House will be more constrained in its policies. We lay out the bull and bear case for that below. (Was this newsletter forwarded to you? Sign up here.)
Bulls see a Trump pivot comingOn earnings calls and in public appearances, business leaders have found their voice against President Trump’s trade war. Even Elon Musk isn’t holding back. They join restive investors who — as shown by market rallies after every seeming backtrack on tariffs — are growing more convinced that the White House will ease off its protectionist trade threats rather than risk a big blow to the economy and Americans’ stock portfolios. The latest: The global relief rally has lost some steam this morning. But a belief that a tariff walk back is coming has gathered strength. Stocks rallied around the world yesterday, helped by a report by The Financial Times that Trump may buckle on some auto tariffs, and one in The Wall Street Journal that duties on Chinese goods could be cut drastically. (That said, Treasury Secretary Scott Bessent sought to temper expectations on how far the administration would go.) Speaking of relief, Jay Powell, the Fed chair whom Trump has repeatedly attacked for not lowering interest rates fast enough, has powerful advocates in the administration. They include Bessent and Commerce Secretary Howard Lutnick, who helped persuade Trump not to try to fire Powell, avoiding further market turmoil and a protracted legal fight, The Journal reports. That’s setting up a bull case that Trump is increasingly restrained, at least when it comes to trade and the Fed:
But there’s a bear case for businesses and the markets as well:
There’s also the complicated reality of trade talks. Trump sees himself as the consummate deal maker, but he and his team face a daunting and even improbable task of racking up quick-win trade agreements. For instance, Britain is in no rush to cut a deal, a sign that countries are slow-rolling negotiations to gain an advantage. And why not? The markets have been flashing warning signs, especially with the battered dollar. DEALBOOK WANTS TO HEAR FROM YOU We’d like to know how the tariffs are affecting your business. Have you changed suppliers? Negotiated lower prices? Paused investments or hiring? Made plans to move manufacturing to the U.S.? Or have the tariffs helped your business? Please let us know what you’re doing.
The White House is said to weigh lifting sanctions on Nord Stream 2. Ending restrictions on the pipeline, which connects Russian natural gas fields to western Europe, and potentially other energy assets would be part of the Trump administration’s efforts to broker an end to the war in Ukraine, Politico reports. That said, President Volodymyr Zelensky of Ukraine has resisted major elements of the U.S. proposal, including ceding vast portions of territory to Moscow, drawing the ire of President Trump. A potential will by the former C.E.O. of Zappos is reportedly found. A document that turned up in the belongings of a man appears to lay out Tony Hsieh’s wishes for his multimillion-dollar estate, according to The Wall Street Journal. After Hsieh died in a house fire in 2020, his family and others have fought over how to distribute his considerable fortune; beneficiaries listed in the document include various charities; Harvard, his alma mater; and family members. Former OpenAI workers oppose efforts to shed the company’s nonprofits status. Ten ex-employees joined with several artificial intelligence experts, including the influential researcher Geoffrey Hinton, in urging regulators to block OpenAI’s bid to become a public benefit corporation, according to The Financial Times. The group expressed concern that the move could erode the company’s safety guardrails around its technology, echoing a point raised by Elon Musk, who is also fighting the move. Musk’s Neuralink is said to be raising funds at an $8.5 billion valuation. The brain-implant company is seeking at least $500 million, and has begun preliminary discussions with potential investors, according to Bloomberg. Neuralink was last valued in 2023 at $3.5 billion, and the company’s device is being tested in humans. Seen and heard, tariff edition“We have three airplanes that we had in China ready for delivery. I think we’ve got two of those already back and we’re bringing the third airplane back. They have in fact stopped taking delivery of aircraft due to the tariff environment.” — Kelly Ortberg, the C.E.O. of Boeing, on CNBC yesterday. The company, whose longstanding ties to Beijing have been strained by U.S. tariffs, planned to deliver 50 airplanes to China this year, but may no longer do so. “The United States was more than just a nation. It’s a brand, it’s a universal brand, whether it’s our culture, our financial strength, our military strength, America rose beyond just being a country — it was like an aspiration for most of the world, and we’re eroding that brand right now.” — Ken Griffin, the C.E.O. of Citadel, speaking yesterday at Semafor’s World Economy Summit in Washington. He added: “I’ll tell you what’s not going to happen is people are not going to race to build manufacturing in America, because with the policy volatility, you actually undermine the very goal you’re trying to achieve.” “If, ultimately, costs are passed to us from those that we buy handsets from, unfortunately, for the customer, we’re going to have to come up with some new ways for them to figure out how to digest that increase in pricing.” — John Stankey, the C.E.O. of AT&T, on yesterday’s earnings call explaining that customers may have to pay more for phones. “One of the important things that we need in our industry is we, first of all, I need clarity, and then I need consistency. Because, as I said, if you know a new vehicle, a brand-new vehicle, comes out every five or six years. To make those investments and to be good stewards of our owner’s capital, I need to understand what the policy is.” — Mary Barra, C.E.O. of General Motors, speaking yesterday at the Semafor event, when asked about whether she planned to invest more in U.S. manufacturing. The web of Trump’s crypto tiesEven before winning re-election, President Trump had made clear that he would treat crypto very differently from former President Joe Biden, promising to unshackle the industry from tight regulation. He has done so — and then some. The news that he is now offering a private dinner to the top 220 investors in his $TRUMP memecoin is the latest reminder that he won’t just champion the industry, but will also embrace it for personal profit. “Have Dinner with President Trump and the $TRUMP Community!” read an invitation. “Let the President know how many $TRUMP coins YOU own!” The event is essentially offering access to the White House in exchange for investing in Trump’s memecoin. Investors responded in droves, with the token’s price shooting up as much as 58 percent after the invite was publicized. $TRUMP’s market capitalization as of this morning stood at nearly $2.4 billion. (A reminder: Some unsophisticated investors have lost a bundle speculating on highly volatile memecoins, including some who mistimed the $TRUMP trade.) “They are making the pay-to-play deal explicit,” Corey Frayer, who oversaw crypto policy for the S.E.C. under Biden, told The Times. Trump himself benefits financially from trading in his memecoin: A business he is linked to owns a big slug of $TRUMP, so he gains a paper profit as the token’s price increases. He and business partners also earn fees whenever the coins are traded, with their windfall amounting to almost $100 million in the weeks after $TRUMP debuted in January. Trump and his family have other ways to profit from crypto:
That’s on top of easing oversight of the crypto industry, which donated millions to Trump’s campaign and to other Republican candidates. This week, Paul Atkins was sworn in as the S.E.C.’s chair, installing a regulator who is expected to pursue more crypto-friendly policies than Gary Gensler did under Biden. The Justice Department has also disbanded its crypto enforcement team, and will restrict its crypto-related focus to matters involving drug cartels or terrorism. We hope you’ve enjoyed this newsletter, which is made possible through subscriber support. Subscribe to The New York Times.
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