In general, it was not a very good week on the securities markets, with anxiety in the bond market and a slowdown in the rapid recovery of the stock market after a significant drop due to the “Liberation Day” and the tariff war. But first things first. This is a quick review from Ivan Kompan, Edinburgh Business School analyst.
The bond market has taken center stage, and U.S. bond investors seem to be the only ones with the courage to tell Trump his decisions are—at best—questionable. Long-term Treasury yields have surpassed 5%, reflecting market concern over ballooning deficits and dwindling demand, as seen in Tuesday’s weak 20-year bond auction.
Lower appetite for U.S. debt is weakening the dollar and pushing inflation expectations higher—now 3.6% for one year and 4.6% for five. This is far from the Fed’s target and dims hopes for imminent rate cuts. Rising bond yields are a headwind for equities, with every spike this week triggering market pullbacks.
Only gold and crypto are benefitting. The latter, at least for now, is beginning to live up to its “digital gold” reputation.
Naturally, it wouldn’t be a typical week without a Trump twist. On Thursday, he unveiled his latest “One Big, Beautiful Tax Bill”—his own words—which passed by a single vote. It hands tax breaks to the wealthy, increases the deficit, and further pressures government funding needs. Bond markets responded negatively.
Earlier in the week, Trump casually threatened Apple over its offshore manufacturing. The issue seemed to fade—until Friday morning, when he reignited it via Truth Social, warning of a 25% tariff on Apple products unless iPhones are made in the U.S. Apple’s stock plunged. The company now faces two tough choices: raise prices or sacrifice profit margins—just as Trump previously told retailers like Walmart and Amazon to “eat the tariffs.”
And the final Friday blow? Trade talks with the EU hit a wall. Trump declared the bloc “very difficult to deal with” and proposed a 50% tariff starting June 1, 2025. Just like that, markets sank, and the so-called “Liberation Day” risks becoming a long-term reality.
*And finally, we would like to remind you that the information you have just listened to is not an investment advisory. Remember – investments in the stock market are always tied up with financial risks. So be careful and cautious.
