President Trump has recently laid out plans to build metals refining facilities on military bases to reduce U.S. dependence on China, which dominates critical minerals production needed for defence and technology. His executive order would appoint a critical minerals czar and expand permitting processes while pursuing a deal with Ukraine to access its rich mineral deposits, including gallium, graphite, and lithium. This initiative could significantly strengthen the U.S. defence manufacturing sector by securing domestic supply chains for fighter jets, submarines, and advanced electronics while reducing vulnerability to China's export restrictions on rare minerals. Trump's strategy links Ukraine support to mineral access and peace concessions, potentially reshaping both international relations and the global minerals market, giving the U.S. A greater negotiating power in its semiconductor dominance.
EQUITY
The main index opened the week negatively, dragged down by recession fears, inflation concerns, and President Trump's tariffs. Tech stocks like Tesla and Nvidia were hit hardest, while utilities and energy sectors gained. The S&P 500 fell below its 200-day moving average for the first time since November 2023, suggesting trouble ahead. Trump's willingness to risk market downturns for policy goals induces flights to safety, with 10-year Treasury yield down to 4.2%.
GOLD
Gold price consolidated ahead of U.S. inflation data, bouncing back and forth with strong resistance at $2,930. Geopolitical tensions, including U.S.-brokered Ukraine-Russia ceasefire talks and President Trump’s fluctuating tariff policies on trading partners, have created uncertainty with lowered perceived safe-haven demand, while a weakening dollar and Treasury yields supported the gold’s near-term demand.
OIL
Crude oil prices fell to last week's lows with continued concern regarding OPEC+’s decision to gradually increase production, alongside rising Russian oil exports and elevated global tanker storage levels outweighing support from U.S. Strategic Petroleum Reserve purchases and sanctions. Near-term global economic slowdown from trade tensions and stagnant Chinese oil imports intensifies bearish sentiment, while U.S. production and rig activity remained steady near record levels. There is a chance OPEC+ may adjust output if prices remain weak, though macroeconomic risks and geopolitical tensions continue to dominate market dynamics.
CURRENCY
The dollar index ended Monday unchanged, although a stock market slump is expected to drive safe-haven demand potentially being offset by the yen hitting a five-month high against the dollar due to strong Japanese wage growth, while the euro stayed near its recent peak with its recent increased EU spending. U.S. inflation data are closely monitored, with concerns about U.S. economic slowdown and trade policies weighing on the dollar.
