Key Takeaways
- US Treasury Secretary Scott Bessent reveals the U.S. and China have identified $30 billion in non-critical goods for potential tariff reductions, yet signals the administration is in "no hurry" to extend the trade truce expiring in November.
- President Trump’s last-minute decision to postpone a military strike on Iran has caused "astonishment" in Jerusalem, while Iran’s Deputy Foreign Minister warns the country is prepared to confront any aggression.
- Spot gold prices plummeted over 2% to $4,472.57/oz following the cooling of immediate military escalations and shifting trade rhetoric.
- NATO’s top commander, General Grynkewich, expects more U.S. troop withdrawals from Europe in the long term as the alliance considers a potential mission to the Strait of Hormuz if it remains closed through July.
- U.S. Pending Home Sales for April rose 1.4%, beating estimates of 1.0%, even as Redfin reports that home sellers are increasingly slashing asking prices due to market weakness.
US-China Trade and AI Guardrails
U.S. Treasury Secretary Scott Bessent announced today that the U.S. and China will initially identify $30 billion of non-critical goods for reduced or eliminated tariffs under a new Board of Trade protocol. Despite this progress, Bessent emphasized in a Reuters interview that the Trump administration is in no hurry to extend the current trade truce, which is set to expire in November 2026.
Bessent also noted that consultations regarding AI guardrails to prevent the proliferation of powerful models are expected to begin within the next four to eight weeks. He is scheduled to meet with Chinese Vice Premier He Lifeng ahead of President Xi Jinping’s planned visit to the White House in September to finalize further trade and investment protocols.
Middle East Tensions and Military Postponements
Geopolitical uncertainty spiked following reports that President Trump decided to postpone a planned strike on Iran at the "very last moment." The decision reportedly left officials in Jerusalem astonished, as they were only updated on the reversal shortly before the scheduled operation. Iran’s Deputy Foreign Minister responded by stating that the U.S. is attempting to present a "threat" as an "opportunity for peace," while maintaining that Iran remains ready for military confrontation.
Simultaneously, the UAE Defence Ministry reported detecting and "dealing with" six drones launched from Iraq over the last 48 hours. In Lebanon, the government has reportedly rejected terms regarding the disarmament of Hezbollah during ongoing talks with Israel, further complicating regional stability efforts.
NATO Realignment and the Strait of Hormuz
NATO Top Commander Grynkewich signaled a significant shift in U.S. military presence, stating that a stronger European NATO allows the U.S. to cut back its presence in Europe. Grynkewich confirmed that the redeployment of an armored brigade from Europe is underway and will not impact the executability of NATO’s defense plans.
The alliance is also weighing a political decision regarding a potential mission in the Strait of Hormuz. NATO officials indicated they will consider deploying forces to protect shipping interests if the strategic waterway remains closed by July. This comes as the U.S. Treasury continues to dismantle financial support systems for Hamas and issues fresh sanctions against several oil tankers linked to Iranian interests.
Market Reactions and Economic Data
The commodities market saw a sharp correction as Spot Gold fell over 2% to $4,472.57/oz, retreating from recent highs as traders weighed the postponement of U.S.-Iran hostilities. In the energy sector, Russia announced plans to boost oil supplies to China via Kazakhstan, while Venezuela’s interim government expressed hope for a return of foreign investment to its energy industry.
On the corporate front, GE Aerospace (GE) secured a U.S. Air Force contract to develop the GE426 engine for an autonomous collaborative platform. In the domestic economy, U.S. Pending Home Sales grew by 1.4% in April, outperforming the 1.0% consensus estimate. However, Redfin data suggests a cooling trend, noting that sellers are slashing asking prices as broader housing market weakness deepens.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.