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Wall Street to open at higher levels after Israel-Iran truce
Wall Street's major indexes are on course for a higher opening on Tuesday after President Donald Trump announced that a ceasefire had been reached between Israel and Iran. This announcement calmed investor nerves following the 12-day conflict, which hurt global risk assets as well as sparked inflation fears. Investors also analyzed Federal Reserve Chair Jerome Powell’s comments, which reiterated the central bank’s approach of waiting and watching interest rates while tariff-driven pressures on prices become apparent. There's no doubt that Trump has pushed for interest rate cuts. "I don't believe Powell will budge," said Peter Cardillo. Chief market economist at Spartan Capital Securities. As supply concerns eased due to the Middle East conflict, oil prices fell by a record two weeks. Before the bell, U.S. oil prices fell as well. Chevron and Exxon both dropped more than 1%. Defense stocks Lockheed Martin fell 1%, and RTX Corp dropped 1.2%. Trump's call to a truce was a dramatic turnaround after the U.S. attacked Iranian nuclear sites at the weekend, and Iran responded by firing missiles into a U.S. military base in Qatar. Israel Katz, Israel's Defence Minister, said that Iranian missiles had been fired in violation and ordered his military to strike Tehran as a response. Trump accused both nations of violating the truce. But optimism about the ceasefire is what has kept stocks supported thus far. At 8:56 a.m. At 08:56 a.m. ET, Dow Eminis had gained 268 points or 0.62%. S&P 500 Eminis had increased 41.25 points or 0.68%. Nasdaq Eminis have gained 208.75 or 0.95%. The benchmark S&P 500 remains approximately 2% below all-time highs. Powell has received Trump's criticisms over not cutting interest rates. The President hinted at firing Powell or naming his successor in the near future. Atlanta Fed President Raphael Bostic said the central bank didn't have to lower interest rates anytime soon because companies are planning to increase prices due to increased import taxes, and the job market remains strong. Michelle Bowman, Fed vice chair, endorsed the policy easing in July. Market participants expect at least two rate cuts of 25 basis points before the end of the year, with September being the first. Later in the day, several central bank officials will also speak, including Fed Board President Michael Barr and Fed Minneapolis president Neel Kahkari. The consumer confidence data for the month of June will be released at 10:00 am. ET. Later this week, the Commerce Department will release its final report on GDP for the first quarter and Personal Consumption Spending (PCE). Tesla shares led the gains with a gain of nearly 2%. Alphabet, the parent company of Google, rose by 1.2% and Amazon.com gained 1.6%. After bitcoin reached a new high, shares of crypto companies increased. Coinbase Global rose 1%, and Strategy gained 1.6%. FedEx, the package delivery company, was up by nearly 1.2% before its quarterly results were due to be released after the closing bell. (Reporting and editing by Devika Syamnath in Bengaluru)
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McGeever: Bowman's turn and oil plunge challenges Fed's hawkish stance
In recent years, the financial markets have consistently underestimated the Federal Reserve’s willingness to reduce interest rates. The latest Fed talk, softer economic data and the dramatic drop in oil prices could indicate that they are right this time. Last week, the central bank appeared to snuff out traders' hopes of a dovish steering. The Fed's summary economic projections maintained its median "dot plot" projection of two rate cuts of 25 basis points this year. It was a close call and the Fed lowered its 2026 forecast from two rate cuts to just one. In the days following, it was widely believed that the hawkish stance of policymakers reflected their desire to anchor inflation expectations. The traders' expectations for rate reductions this year dropped to less than 50 basis points. This reading may be premature. First, the fear of rising energy costs due to conflict in Middle East has disappeared. Oil prices have fallen back to their previous levels, despite the fact that they rose by as much as 17 percent in the days following the Israel-Iran conflict on June 13. The price of oil is falling and, late Monday night, U.S. president Donald Trump announced the two countries had reached a ceasefire. The Fed has made a number of dovish remarks in the past few days, and they are not only from the usual suspects. This suggests that the U.S. Central Bank may be closer than previously thought to lowering rates. NEGATIVE SURPRISE It is not impossible to justify a more dovish approach. Fundamentally, the U.S. economy is deteriorating. Citi's U.S. Economic Surprises Index has been declining since the end May, and is now a negative number. This means that economic data are underperforming expectations. It fell to its lowest level since September of last year. It is important to be cautious when analyzing the economic surprise indexes following significant movements, because initial expectations could have been overly pessimistic. The current shift is a valid red flag. We look at the surprise factor and how it compares to consensus expectations. Citi's Stuart Kaiser points out that both have fallen into negative territory. The 'hard activity data' index is also now negative. What is 180 DEGREE Turn? Michelle Bowman, Fed Vice Chair of Supervision, surprised investors by saying that she would vote for a rate reduction as early as July if the inflation pressures remained contained. Bowman's remarks are important. She hasn't spoken about the economy for over two months. In March, she said that the labor market would be a more significant factor in policymaking. Since her appointment as Fed governor in 2018, she has been consistently one of the most hawkish members on the Federal Open Market Committee. The move came after Governor Christopher Waller said on Friday that a rate reduction next month was on the table. Waller is one of the FOMC’s most dovish members. This is not surprising. But traders and investors should take note if a FOMC hawk such as Bowman now sings from the same hymnal. Cynics might question the timing of Bowman’s apparent 180-degree turnaround, which comes just as Trump intensifies his attacks against Fed Chair Jerome Powell over not reducing interest rates. There's no evidence that political pressure was at work. The recent drop in oil prices will also help her case. It fell 7% on Monday, the largest drop in three years. It was more impressive when you consider that it opened the day at 6% and reached a five-month peak in response to Saturday's U.S. nuclear bombing. The price of crude oil did not increase on an annual basis following Israel's initial strike against Iran on June 13. Oil prices have been falling since January and are down by 20% on a year-over-year basis. It's not energy prices that are causing inflation to be sticky. Waller - and Bowman - will love this. It is possible that traders are not overestimating the Fed’s willingness to reduce rates this time. They could be on the right track with their bets that 125 bps will be eased by the end next year. You like this column? Check out Open Interest, your new essential source for global commentary on financial markets. ROI provides data-driven, thought-provoking analysis. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X.
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Qatari PM: After missile salvo on US base, Qatari-Iran relations are damaged but will recover.
Qatar's Prime Minister said Tuesday that the Iranian missile attack on a U.S. base in the Gulf Arab State had damaged relations between Qatar and Iran. However, he expressed hope that they would "return to normal" at some point. Iran fired missiles at Al Ubeid Air Base on Monday in response to the U.S. involvement in Israel's war against Iran. No one was injured after Tehran provided advance warning. A ceasefire Washington announced the news a few hours later. Qatar, located just across the Gulf of Aden from Iran, is often used as a regional mediator, such as between Iran and the United States, or between Israel and Hamas during the ongoing Gaza War. The Qatari Prime Minister, Sheikh Mohammed bin Abdulrahman Al Thani said at a Doha press conference that the incident would definitely leave a scar on the relationship with Iran. However, I hope everyone will learn the lesson by then and not violate or undermine this type of neighbourhood relationship. He said: "The partnership between Qatar, the U.S. and Iran is growing stronger... I hope that the good relationship will return to normal with Iran as soon as possible." Al Thani said that Qatar had worked with Iran to facilitate a ceasefire at Washington's request. He said: "We hope that the ceasefire will be maintained as agreed, and we urge the U.S. to negotiate with Iran in order to reach a diplomatic solution which Qatar has been seeking for years." He said that Masoud Pezeshkian, the Iranian president, expressed regret to Qatar's ruling emir Sheikh Tamim bin Hamad Al-Thani in a telephone call that Tehran's intended target for retaliation against U.S. aerial strikes was a Qatari military base.
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Growing lettuce with fog in Chile's Atacama desert, the world's driest.
Researchers and growers in Chile's Atacama desert, the driest place on earth, are trying to capture moisture from fog to grow lemons and lettuces. They use a net that catches the drops. Near Chanaral, in the Atacama desert, where there are areas that have not seen rain for years, Orlando Rojas told reporters, "We grow hydroponic lettuce completely with fog water." "We've tried other crops and they didn't work, so we tended to do lettuce." Researchers at the UC Atacama Desert Center have launched a web-based mapping tool that allows anyone to see the locations of areas in the country with the potential to harvest fog-water. They are trying to cultivate these arid regions. Camilo Del Rio is the director of UC Atacama Desert Center. He said, "We know that it has a lot of potential. We know that we can use it as a solution and an option for different water needs on different scales in different areas where there are significant water shortages." The system is used to collect and store water in tanks in the midst of barren, rocky hills, and white, dry sand. A mesh is suspended between two poles and it intercepts the moisture in the air. Rojas said that the water collected from this region was also being used to grow lemon trees. This water resource is the source of life. We haven't stopped since we first learned about the project. It is essential for human survival." Mario Segovia from the fog-catching team also said that the collected water from moisture in air is pure. He said, "The harvest looks good, it is a super-healthy food, with pure organic nutrients." They're in water with nutrients because fog-catcher water has no chlorine or minerals. (Reporting and writing by Rodrigo Gutierrez, editing by Nia William)
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Copper reaches two-week high due to softer dollar, and Iran-Israel cease-fire
The dollar dropped and the yuan rose after U.S. president Donald Trump announced a ceasefire agreement between Israel and Iran. The price of three-month copper at the London Metal Exchange rose 0.8% to $9,743.50 per metric tonne by 1013 GMT, after reaching its highest level since June 11, when it reached $9,760.50. Market attention focused on the continued outflow of copper from warehouses registered with LME. The combination of large cash copper contracts, warrants (title documents conferring ownership) and other factors has led to an increase in the premiums on near-term contracts. The premium for cash copper contracts over the 3-month forward On Tuesday, the price of a ton dropped to $249. It closed at $280 Monday, its highest level since November 2021. This indicates tightness in LME copper market. The LME approved warehouses have seen a 65% drop in copper inventories since mid-February, with 94,675 tonnes, the lowest level since August 2023. Some traders moved metal to the United States, hoping to profit from the premium offered by COMEX copper contracts over the LME benchmark, while Washington continues to examine potential tariffs against copper imports. Metal traders said that the metal was dripping out of warehouses daily. The LME copper price is lower than Comex, so the LME system can't attract delivery. Aluminium fell 0.3% on the LME to $2,581 per ton, as the Iran-Israel ceasefire lowered oil prices, and the Middle East aluminium producers no longer faced an immediate threat in the Strait of Hormuz shipping lanes. Aluminium, whose smelting requires large amounts energy, reached a three-month peak of $2,654.50 Monday. LME lead increased 1.1% to 2,024.50 after reaching $2,025.5, its highest level since March 31, while zinc rose 0.9% to 2,711 after touching its highest level since June 4. Nickel gained 1.3%, to $14.990. Tin fell 0.1%, to $32,670. (Reporting and editing by David Goode)
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Tata Motors, owner of JLR, says there has been no panic button pressed on curbs made from rare earths.
Tata Motors (owner of Jaguar Land Rover), the luxury carmaker, announced on Tuesday that it was planning alternative sources for rare earth magnets. The company also said that China's export restrictions haven't caused them to panic yet. China's restrictions on rare-earth imports have caused a global automotive industry disruption. Companies are warning of an extreme supply shortage. Rare-earth magnetic materials are used for everything from anti-lock brake sensors to windshield wiper motors. "At the moment, I don't think there is any panic as we are confident that supplies will be forthcoming." No production has been curtailed. "At this time, nothing is planned," CFO PB Baliaji said at a Mumbai event. He added that sources, such as alternate technologies, were being investigated. Maruti Suzuki India's largest carmaker has cut its near-term production target for its electric vehicle eVitara by more than two thirds due to rare-earth shortages. China controls over 90% of global magnet processing capacity, which is used in automobiles, home appliances, and clean energy. As part of its response to the high tariffs imposed by the United States, China enacted in April restrictions that required companies to obtain permits from Beijing. Early June, it was reported that India held talks with companies in order to create long-term stocks of rare earth magnets. Balaji said that Jaguar Land Rover's luxury division, Tata Motors, would take price increases "in a calibrated way" to counteract the impact of U.S. Tariffs. Range Rover lowered its forecast for fiscal 2026 earnings margins before interest and tax to 5%-7% from 10% last week, amid uncertainty surrounding the global auto industry due to U.S. Tariffs. Balaji said that Tata Motors does not plan to build a manufacturing facility in the U.S., as a way to offset the tariff impact. Aditi in Mumbai, Meenakshi in Bengaluru and Manvi in Bengaluru. Reporting by Aditi and Meenakshi. Writing by Manvi. Editing by Sonia Cheema, Rashma Aich and Sonia Cheema.
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Portugal's budget surplus jumps up to 0.2% in the first quarter
Official data released on Tuesday showed that Portugal's budget surplus in the first quarter was 0.2%, up from 0.4% in the previous year. This is despite a contraction of the economy in the first three month of the year. The National Statistics Institute reported that public revenues increased 7.8% on an annual basis, with "increases across all components", and expenditures rose by 6.4%. The INE stated that expenditure on social benefits, salaries of civil servants and interest payments increased, but subsidies to the National Electric System for tariff reduction decreased. Portugal's economy shrank by 0.5% from the previous quarter, as exports dropped and imports increased in anticipation of tariff increases amid global trade disputes. However, it still grew by 1.6% on an annual basis. Last week, Finance Minister Joaquim Miranda Sarmento stated that Portugal, despite the high level of uncertainty surrounding geopolitical tensions and trade conflicts, maintained its goal to have a budget surplus this year of 0.3%, down from the 0.7% of 2024. However, the central bank had predicted a shortfall of 0.1%. He expects that the economy will grow by more than 2% in this year. This is slightly higher than last year's 1.9% growth rate.
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Kremlin denies it helped Iran little
The Kremlin reacted to criticism on Tuesday that it hadn't done enough for Iran. It said it had taken "a clear position" in condemning U.S. Vladimir Putin condemned the "unjustified attacks" by the United States on Iranian nuclear sites, which he had signed a treaty of strategic cooperation with in January. He stated on Monday that Russia will try to assist the Iranian people. However, he did not give any specifics. Earlier this week, Iranian sources said that Tehran was not impressed by Russia's support. When asked about the comparisons with the overthrow of Syrian leader Bashar Al-Assad last year, when Moscow refused sending troops or more power in the air to keep its ally at power, the Kremlin responded that some people are trying to ruin the Russian-Iranian relationship. Dmitry Peskov, Kremlin spokesperson, said that Russia had supported Iran's position with its clarity. He added that Abbas Araqchi the Iranian Foreign Minister appreciated Moscow's stand when he met Putin Monday. Peskov stated that it was too early to determine the extent of damage to Iran's nucleus facilities. Peskov stated that "some information is being received through the proper channels, but at this time it is too early." "No one has a complete understanding at this time." Peskov, when asked about a report claiming that Araqchi brought a letter from the Supreme Leader Ayatollah Ayatollah Khamenei to Putin, said no document had been handed over. "The fact that certain messages were sent by the Iranian leadership are true." Peskov stated that the report was not true. Donald Trump, the U.S. president, announced a ceasefire on Monday between Israel and Iran. This could end the 12-day conflict that caused millions to flee Tehran. It also sparked fears of a further escalation. Peskov added that Qatar was credited with brokering the ceasefire. The Russian Federation has called for this since the beginning of the conflict. This is a good thing and we should welcome it. We also hope that the ceasefire will last. (Reporting and writing by Dmitry Antonov, editing by Mark Trevelyan).
US Treasury allows miners to access tidy energy manufacturing aid
The U.S. Treasury Department said on Thursday it would permit some mining companies to access a tax credit aimed at improving American production of solar panels, lithiumion batteries and other clean energy components, a shift in position after industry pressure.
The relocation reflects the growing awareness in Washington that efforts to fight climate modification will be moot unless the U.S. enhances its production of lithium, cobalt, and other important minerals and curbs dependence on China and other overseas rivals.
Washington last December issued proposed guidelines for producers to access the so-called 45X tax credit, produced by President Joe Biden's 2022 environment modification law, the Inflation Decrease Act, which offers a 10% production credit for U.S.-made products.
Those draft guidelines left out raw materials from the production expenses in favor of processing. For instance, the mining of lithium would not have gotten the credit, however the processing of that lithium into a kind functional to develop a battery would.
The mining industry sobbed foul, noting that processing is difficult without very first extracting a mineral.
Mentioning feedback from stakeholders, the Treasury Department on Thursday reversed itself, stating that the product costs and extraction costs would be qualified for the tax credit under the last 45X rules, supplied particular conditions are met.
The Biden-Harris administration understands how essential onshoring the production of critical minerals is to developing secure, tidy energy supply chains, Wally Adeyemo, the deputy Treasury secretary, informed press reporters on a call.
This will not only assist incentivize additional mining, however will indicate that mining that currently exists is more rewarding and they can make higher investments in those mines, he said.
The last guidelines state that the credit can only be acquired once an eligible element is created, essentially favoring mining business that own processing centers. The mining would need to happen in the United States, authorities said.
The action of extraction alone does not produce an eligible part, the Treasury Department stated in the final rule, which went to 177 pages.
That might assist Sibanye Stillwater, which mines and procedures palladium in Montana and had actually promoted the 45X growth to offset fierce Russian competitors. However a number of proposed U.S. nickel mines, for example, would not be qualified due to the fact that the U.S. does not yet have a nickel smelter.
Senator Jon Tester, a Montana Democrat who pressured the Treasury Department for months to alter the rule, said the move will assist Sibanye's operations in his state and reinforce our supply chains and our nationwide security.
Ali Zaidi, the White Home national climate advisor, offered the theoretical example of a lithium hydroxide processor that also runs a lithium mine. That business would be eligible for a. 10% per metric ton credit for the mining and another 10% per. metric lot credit for the processing, he said.
This is definitely a game changer for our capability to lean. into mineral security, said Zaidi.
The credits would start phasing out in 2030 and end after. 2032 for tidy energy elements. Important mineral credits will. not stage out.
The National Mining Association, whose members consist of. mining business that do not process metals, said it appreciated. the upgraded rules however was dissatisfied they were linked to. processing.
Treasury's decision to limit the credit to those manufacturers. who also fine-tune materials will prevent numerous important tasks. from taking advantage of the credit as Congress planned, stated Rich. Nolan, the trade group's CEO.
(source: Reuters)