And, just like that, tariffs are back – at least until June 9 when a Federal appeals court’s stay expires.

Futures are off modestly as traders assess the tariff news and hotter than expected personal income and spending prints and PCE prices which were in line with expectations.University of Michigan consumer sentiment is due out at 10am ET.

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In a surprising twist, a federal court has potentially halted Trump’s tariff war in its tracks, saying that he exceeded his authority in imposing the most extreme tariff regime in US history. The three judge panel (including a Trump appointee) ruled unanimously that the US Constitution gives Congress exclusive authority to regulate commerce with other countries.

“The court does not pass upon the wisdom or likely effectiveness of the President’s use of tariffs as leverage,” a three-judge panel said in the decision to issue a permanent injunction on the blanket tariff orders issued by Trump since January. “That use is impermissible not because it is unwise or ineffective, but because [federal law] does not allow it.”

Naturally, the administration has appealed and is questioning the court’s authority and accusing it of judicial overreach.

From an economic and markets perspective, this development will greatly increase confusion and uncertainty. Consider the recent budget passed by the House with a one vote margin which included substantial tariff revenue in its calculations. Consider the impact on currency flows. Consider all the recent announcements – many disingenuous – of manufacturing being moved/returned to the US.

Consider the potential reduced inflation. If you remove inflation from the current stagflation forecast, you’re left with plain ol’ stagnation. Indeed, interest rates are falling along with the DXY. The only certainty in this development is that the chaos of the Trump presidency will continue.

Futures are up strongly but off their highs after mixed economic news and a beat by NVDA.

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Futures are essentially flat in advance of today’s FOMC minutes.

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Once again, the arsonist sprinkled a little water on the fire and is looking for a reward. After sending markets into another freefall last week with the imposition of 50% tariffs on the EU, Trump “rescued” them by delaying the start date.

As expected, SPX backtested its SMA200. ES is back above its. All is good, until the next calamity strikes.

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Futures took a nosedive this morning when Trump tweeted in quick succession that the EU trade talks were going nowhere and that Apple must move manufacturing to the US. The penalty for not bending to his will in each case is a 50% tariff.

Markets are still adjusting to our new mob boss system of government.

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The 10Y broke out again yesterday, sending and S&P 500 100 points lower on the day. The House’s budget bill passage, which promises to sharply hike the deficit/debt while cutting medicare and medicaid, won’t help.

The next big test for bears will be SPX 5767, the 200-day moving average.

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Futures are off about 0.50% as we lead up to the open.

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Futures are slightly lower as we approach the open.

FWIW, Jamie Dimon is still talking overpriced equities and stagflation, stating that the risks are essentially double what the market thinks.

Meanwhile, as Trump’s trade war continues, non-US investors are understandably nervous about America’s shaky finances in light of Republicans spending megabill that could add $3.3 trillion to the already ballooning deficit.

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Whether it was Moody’s debt downgrade, Trump’s insane rants, or his picking a fight with corporates such WMT and AAPL, this was not a great weekend for the US. Any way you look at it, America was downgraded and markets are hinting at a “sell America” bias.

Futures are off sharply with the 10Y back above 4.50% and the 30Y back above 5.0%.

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Housing starts rose a measly 1.6% to 1.36M, but it was single family permits that really disappointed in April, coming in at 1.41M versus 1.45M expected and 1.48 prior. The slump is a reflection of falling builder sentiment due to higher Trump tariffs, a shrinking labor supply amide his crackdown on immigration, and persistently high mortgage interest rates.

Another economic data point which is usually ignored came in much higher than expected. Import prices rose 0.4% versus 0.1% for the month. We should see an even higher print next month when the front loading effect falls away.

Futures have come down off their earlier highs, but are still up slightly ahead of the open.

Keep an eye on University of Michigan Consumer Sentiment due out at 10am. It is nearing all-time lows, and is one of the few important economic data points that can’t be influenced by politicians.

A spate of studies has shown that the average American family is having a very tough time with its finances.

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