Three-front fight

The European Union is preparing for another round of trade talks with the US, but it’s also warning that it may speed up retaliatory measures if President Donald Trump follows through on his latest threat: a 50% levy on steel and aluminum imports. The European Commission, which handles trade matters for the EU, said Monday it “strongly” regrets the tariff hike—up from an originally planned 25%—and said the move is undermining efforts to reach a solution to the trade conflict. The EU’s trade chief, Maros Sefcovic, is to meet with US Trade Representative Jamieson Greer on Wednesday in Paris and a team from the commission is on its way to Washington to continue technical talks.

The message from Europe comes as Trump faces fresh headwinds on two other fronts of his trade war. After the US and China agreed to lower tariffs from astronomical heights—a temporary deal that largely satisfied Beijing’s demands—tensions are now surging over access to chips and rare earths. And Beijing increasingly appears to have the upper hand. Meanwhile back home, the legality of most of the Republican’s tariffs has been called into question by federal judges for violating not only the law on which they were ostensibly based, but a Supreme Court doctrine that deems such monumental moves the province of Congress. —David E. Rovella

What You Need to Know Today

Treasuries began June on the back foot, with 30-year bond yields testing the 5% level as concerns over Trump’s tariff policies resurfaced at the start of a data-heavy week for assessing the health of the US economy. Benchmark yields were trading four to seven basis points higher across the curve and yields resumed climbing after a brief pullback in response to weaker-than-expected US ISM manufacturing data for May. The ISM remains in contraction territory below 50.

Following their first monthly decline of 2025 as measured by a Bloomberg index, US Treasuries—particularly longer-dated maturities—continue to face pressure amid persistent concerns over the nation’s fiscal outlook. “Our strongest conviction has been staying underweight long-term US Treasuries,” BlackRock Investment Institute said in its latest weekly note. Amid persistent deficits and sticky inflation, the asset manager is watching to see whether the GOP-controlled Congress passes a budget bill that could push the US deficit trillions of dollars higher, and “impact foreign investors and drive term premium even higher.”

For DoubleLine Capital, there are two approaches to consider when it comes to 30-year US Treasuries: either avoid them or outright short them. Wary of America’s swelling federal budget gap and growing debt burden, the money manager led by Jeffrey Gundlach is part of a wave of investment firms—including Pacific Investment Management and TCW Group—that are steering away from the longest-dated US government bonds in favor of shorter maturities that carry less interest-rate risk.

The US 30-year bond has been a stark underperformer in 2025. Yields on the maturity have risen, while those on 2-, 5- and 10-year notes have fallen. This sort of divergence is rare—the last time it happened over a full year was in 2001—underscoring the pressure on the long bond as investors demand added compensation to lend to the US government for such a long period. So bad has been the rout that speculation has even begun to swirl that the Treasury might scale back or halt auctions of the long bond.

Bad news for bonds notwithstanding, a rebound in big tech drove stocks higher Monday after a slide driven in part by that weak manufacturing data. Coming off the S&P 500’s best May in 35 years, the benchmark edged up at the start of what’s historically one of its quietest months for gains. Nvidia led an over 1.5% rally in a measure of chipmakers and, despite the potential consequences described above, US steel and aluminum shares surged on Trump’s latest tariff threats. Here’s your markets wrap.

Speaking of BlackRock, the firm is ramping up plans to offer more of its private-market products to individuals outside the US as it tries to muscle in on one of the hottest areas in global finance. The world’s largest asset manager is targeting a hiring drive and tie-ups with digital investment platforms in Europe, the Middle East and Africa to boost individual investor access to its private-markets products, BlackRock executive Fabio Osta said in an interview. “We’ll continue expanding,” said Osta (below), head of BlackRock’s alternative-specialists team for its EMEA wealth unit. “We want more people in private markets.”

South Koreans head to the polls Tuesday to elect a new president to lead the nation after an attempt to impose martial law last year triggered its worst constitutional crisis in decades. Opposition Democratic Party nominee Lee Jae-myung was the frontrunner ahead of conservative ruling People Power Party candidate Kim Moon-soo in final polls conducted last week. A third contender, Lee Jun-seok, a former PPP leader now running for the Reform Party, was splitting the conservative vote.

The winner will face the challenges of trying to unite a deeply fractured country and restore growth to a shrinking economy amid Trump’s trade tariffs. The election outcome also has potential to impact foreign policy. While the candidates have largely indicated they will continue to build on trilateral relations with the US and Japan, Lee favors a more balanced approach to dealing with Washington and Beijing, and the possibility of dialogue with Pyongyang.

What You’ll Need to Know Tomorrow

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