Macro

The U.S. and China agreed to reduce reciprocal tariffs from 125% to 10% for 90 days, maintaining limited duties on fentanyl-related goods, following high-level talks in Switzerland. The de-escalation boosted global markets, with surges in U.S. futures, European indices, and oil prices, signaling relief over eased trade tensions. However, analysts caution the truce may not lead to a lasting resolution, as structural issues and remaining tariffs persist.

Consumer sector sentiment is slightly bearish this month despite a temporary U.S.-China tariff truce, as the relief proved underwhelming against broader demand concerns. The 90-day tariff reduction provided limited near-term benefit, failing to offset ongoing consumer caution in discretionary spending. Broader macro pressures continue to weigh on sentiment, with little evidence yet of sustained trade normalization.

Trump's tariff escalation raised construction and material costs and kept inflation and rates elevated, leaving housing sluggish and office CRE still distressed though bottoming in some markets; a grinding, modestly negative year for owners.

President Trump signed an executive order to align U.S. drug prices with lower international rates, targeting medications with the largest cost disparities, including GLP-1 drugs. The policy, facing legal and implementation challenges, could pressure drugmakers' profits and innovation, while boosting scrutiny of foreign pricing practices; however, markets shrugged, with major pharma stocks rising post-announcement.

Healthcare sentiment is bearish this month, driven primarily by Trump's directive to tie U.S. drug prices to the lowest rates globally, which pressures pharmaceutical pricing power and erodes near-term profit expectations. The policy reignites concerns over regulatory risk across the sector, particularly for large-cap drug manufacturers reliant on U.S. revenue. While broader macro conditions remain stable, the pricing precedent casts a shadow over innovation-driven valuations.

Market recovery after tariff pause

Tariff pauses and deals ease the blow

AI dominated but with sharp shocks — the Stargate $500B venture, then DeepSeek's late-January rout wiped a record ~$589B off Nvidia; April's tariff shock hit chipmakers before the AI buildout (Nvidia-OpenAI $100B) drove a strong second-half melt-up.

Meta and Alphabet AI-ad strength kept owners positive, interrupted by the January DeepSeek shock and April's Trump tariff selloff that raised hardware-cost and recession fears. Positive with a spring dip.

Trump signed four executive orders intended to quadruple US nuclear power capacity within 25 years, granting the energy secretary authority to approve advanced reactor designs, reorganizing the NRC with an 18-month deadline to act on applications, creating a pilot program to put three experimental reactors online by July 4, 2026, and invoking the Defense Production Act to secure reactor fuel. The push is driven by surging electricity demand from AI data centers, though experts called the 4x target highly unlikely and warned that weakening the independent NRC could compromise safety. Advanced-reactor startups such as Valar Atomics and Radiant Nuclear hailed the orders as a watershed moment for the industry.

The energy sector this month feels stable but not significantly uplifted, as the executive push to accelerate U.S. nuclear power development provides a constructive tailwind. However, the impact is tempered by the narrow scope of the action and absence of broader policy or market-moving catalysts, leaving overall sentiment only modestly improved. The neutral +0.10 read reflects limited near-term expectations despite the positive signal on nuclear.

The late-January DeepSeek shock briefly crashed our AI-power trade on fears demand was overstated, but the data-center buildout and nuclear and gas-turbine supercycle reasserted themselves, keeping owner sentiment strong through tariff-driven volatility.

Gold topped $4,000 for the first time on the debasement trade, silver and precious metals surged, and China's sweeping rare-earth export controls handed pricing leverage to Western critical-minerals producers, a euphoric year for hard-asset owners.

European rearmament (the EU 'ReArm Europe' plan), the June NATO 5% spending target, and the June Israel-Iran war with US strikes on Iran's nuclear sites drove euphoric demand; China's rare-earth export curbs added an input-supply risk but demand overwhelmed it.