Market Overview

Oil prices pulled back on Friday after jumping for five days straight, following reports that China is trying to restart peace negotiations between the U.S. and Iran. This pause helped stock markets recover some losses, though bond prices fell further and yields hit their highest levels in years, particularly in Europe. The European Central Bank's chief economist said the bank is managing a medium-sized inflation problem but believes prices will stabilize at the bank's 2% target within about a year. Currency markets reflected the broader tension: the U.S. dollar gained its most ground in five weeks, while the Japanese yen had its worst week in over two months. On the positive side, American new home sales rose in June, showing that buyers are still active in the housing market despite homes becoming increasingly difficult to afford.

President Trump has placed new import taxes on goods from more than 80 countries, covering 99.4% of U.S. trade. He used a 1974 trade law officially aimed at forced labor to bypass a Supreme Court ruling that struck down his previous tariff system five months ago. Trump quickly added a threat of even higher tariffs against the European Union after it fined Google over its app store rules. Critics argue he is using a temporary legal tool as a permanent way to challenge Europe's power to regulate American tech companies. Two small businesses have already filed lawsuits, leaving the courts to decide if this latest move is an illegal expansion of presidential power.

Paramount's plan to buy Warner Bros. Discovery for $111 billion hit a legal roadblock this week when a federal judge granted a temporary pause on the deal. Twelve state attorneys general, led by California's Rob Bonta, sued to stop the merger, arguing that combining two of Hollywood's five major studios and two of five major cable TV networks would reduce competition and give too much power to one family over what Americans watch. Paramount agreed Friday to delay closing the deal until a judge makes a final ruling or June 1, 2027—whichever comes first—meaning this deal won't happen before 2027. The delay is expensive: Paramount must pay Warner shareholders roughly $650 million every 90 days the deal is delayed, and if the deal falls apart entirely, Paramount owes a $7 billion breakup fee. The judge already signaled concern about the deal, noting the combined company would control a substantial share of movie theater distribution, which is enough to suggest an antitrust violation. Writers and other creators have also filed their own lawsuits against the merger.