Israel Launches Airstrikes On Tehran: Stock Futures Plunge; Oil And Gold Soar

Summary:

Futures and yields are tumbling, and gold and oil are surging following reports of successive explosions in Iran as a result of Israeli airstrikes.

Futures and yields are tumbling, and gold and oil are surging following reports of successive explosions in Iran as a result of what Al Arabiya and Axios report are Israeli airstrikes.

Separately Axios reports that the Israeli Air Force conducted a strike in Iran, citing two unidentified people with knowledge of the operation. It was not immediately clear who Israel is targeting.

In kneejerk response, stock futures are tumbling...

... as are bond yields...

... while Oil (where we recently warned that the record shorts will be badly burned)...

... and gold are soaring.

Source: Zero Hedge

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Olivia Brooks

China–U.S. Trade War

Economic

Commodity

The Trump administration is developing a plan to use Cold War-era powers to prioritize and fund rare earth projects it deems critical to national security, people familiar with the matter said.

Officials are discussing using the Defense Production Act to tap financing, loans and other means for rare earths element-related projects, including mining, processing and other downstream technologies to bolster the US’s capability to build a domestic supply chain, the people said. A specific course of action or a timeline have yet to be finalized, the people said.

MP Materials Corp., the sole domestic producer of rare earths, would be a prime beneficiary. Deputy Defense Secretary Steve Feinberg is working to line up funding for the company, people familiar with that matter said. The Nevada-based mineral processor has received millions in funding from the Defense Department.

A spokesman for MP Materials declined to comment. Representatives for the White House and the Pentagon didn’t immediately respond to requests for comment.

Defense Secretary Pete Hegseth in a congressional hearing this week said that MP Materials “is a great example of a place where we can partner with industry” and that Feinberg is focused on sourcing rare earths supply.

The US currently lacks the so-called mine-to-magnet capability at scale, and invoking the emergency authority will give the Defense Department and other agencies tools to speed up sourcing that severely lags China’s dominance in the industry. The urgency has only increased since Beijing flexed its rare earths capacity as leverage in trade talks with Washington over the past month.

Beijing’s decision to block exports of rare earths focused Trump administration attention on China’s dominance in processing the materials used in semiconductors, jet engines and other technology, and it’s stoked a surge of interest in rapidly developing US supply chains.

An existing US stockpile is “massively insufficient” Burgum said, adding that billions of dollars could be needed to build a bigger mineral reserve.

The latest discussions come more than two months after President Donald Trump signed an executive order to boost production of critical minerals that encouraged faster permitting for mining and processing projects.

While that order encompassed rare earths, one of the people familiar with the matter said issuing a new directive is essentially a chance for Trump to publicly message that he’s countering Beijing on a US vulnerability that’s inflamed trade tensions between the world’s largest economies.

At the National Energy Dominance Council, David Copley is leading work on the rare-earths issue and has been tasked with coordinating most efforts related to critical minerals, people familiar with the matter said.

Copley, a former executive with the mining company Newmont Corp., has been receiving proposals for how the US can quickly build out its own critical minerals supply chains and lists of potential shovel-ready projects the government can quickly invest in through DPA and other funding avenues.

Copley’s role has taken on new prominence as a result of Elon Musk’s efforts to downsize the federal bureaucracy that have led to a wave of buyouts, resignations and retirements at key federal offices working on supply chain issues.

The Trump administration revived Biden-era efforts to create a domestic supply chain for rare-earth magnets after China in April clamped down on exports of the materials, Bloomberg News reported last week.

As part of the effort, officials solicited proposals to bolster domestic supplies of the magnets within the next six to 12 months.

Source: Bloomberg Europe

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Manuel

Political

Middle East Situation

U.S. President Donald Trump said on Thursday an Israeli strike on Iran "could very well happen," and a senior Israeli official told the Wall Street Journal it could occur as soon as Sunday unless Iran agrees to halt production of material for an atomic bomb.

U.S. intelligence has indicated that Israel has been making preparations for a strike against Iran's nuclear facilities, and U.S. officials have said on condition of anonymity that Israel could attack in the coming days.

The Wall Street Journal report was the first suggestion of a potential date for an Israeli strike on its longtime foe Iran as Israel tries to block Tehran from developing a nuclear weapon.

Trump on Thursday reiterated his hopes for a peaceful end to the tensions, and there was counter-speculation that the threat of an Israeli attack was a tactic intended to pressure Iran into concessions on its nuclear program at the negotiating table.

"We remain committed to a Diplomatic Resolution to the Iran Nuclear Issue!" Trump wrote on his Truth Social platform.

"My entire Administration has been directed to negotiate with Iran. They could be a Great Country, but they first must completely give up hopes of obtaining a Nuclear Weapon," he added.

Tensions have been building as Trump's efforts to reach a nuclear deal with Iran appear to be deadlocked.

U.S. and Iranian officials were scheduled to hold a sixth round of talks on Tehran's escalating uranium enrichment programme in Oman on Sunday, according to officials from both countries and their Omani mediators.

Speculation about an Israeli attack has raised fears that such a move could spark a regional war and retaliatory strikes from Iran, which has vowed to destroy Israel.

Axios reported on Thursday that the White House has told Israel the U.S. will not be directly involved in any Israeli strike on Iranian nuclear facilities, quoting two U.S. sources and an Israeli source familiar with the discussions.

Analysts have said Israel is unlikely to act without U.S. support, citing past threats on Iran that fizzled out without Washington's backing.

The Wall Street Journal said the U.S. would not provide "offensive assistance" to Israel for an attack on Iran.

While the U.S. could still aid Israel with intelligence or logistics support as well as help defend Israel if Iran strikes back, it was unclear how the reported U.S. unwillingness to participate directly might influence Israeli decision making.

Axios said a solo Israeli operation would be more limited because its air force does not have bombers that can carry the bunker buster bombs needed to hit Iran's Fordow underground uranium enrichment facility.

IRAN IN BREACH, UN BODY SAYS

The U.N. nuclear watchdog's board of governors on Thursday declared Iran in breach of its non-proliferation obligations, and Tehran announced counter-measures. A senior Iranian official said a "friendly country" had warned it of a potential Israeli attack.

Security concerns have risen since Trump said on Wednesday that U.S. personnel were being moved out of the region because "it could be a dangerous place" and that Tehran would not be allowed to develop a nuclear weapon.

Israeli Prime Minister Benjamin Netanyahu raised the possibility of strikes in a phone conversation with Trump on Monday, the Journal reported, citing two U.S. officials.

"I don't want to say imminent, but it looks like it's something that could very well happen," Trump told reporters at a White House event earlier on Thursday, adding Iran could not be allowed to develop a nuclear weapon.

"I'd love to avoid the conflict," he said. "Iran's going to have to negotiate a little bit tougher, meaning they're going to have to give us something they're not willing to give us right now."

Security in the Middle East has already been destabilised by spillover effects of the Gaza war between Israel and Palestinian militant group Hamas.

Trump has threatened to bomb Iran if the nuclear talks do not yield a deal and said he has become less confident Tehran will agree to stop enriching uranium. The Islamic Republic wants a lifting of U.S. sanctions imposed on it since 2018.

Trump on Thursday also expressed frustration that oil prices had risen amid supply concerns arising from potential conflict in the Middle East.

With Washington offering little explanation for its security concerns, some foreign diplomats suggested that the evacuation of personnel and U.S. officials anonymously raising the spectre of an Israeli attack could be a ploy to ratchet up pressure on Tehran for concessions at the negotiating table.

A senior Iranian official told Reuters on Thursday the latest tensions were intended to "influence Tehran to change its position about its nuclear rights" during the Sunday talks.

Iranian President Masoud Pezeshkian said that even if the country's nuclear facilities were destroyed by bombs they would be rebuilt, state media reported on Thursday.

BREACH OF NON-PROLIFERATION OBLIGATIONS

The International Atomic Energy Agency's Board of Governors declared Iran in breach of its non-proliferation obligations for the first time in almost 20 years, raising the prospect of reporting it to the U.N. Security Council.

The step is the culmination of a series of stand-offs between the IAEA and Iran since Trump pulled the U.S. out of a nuclear deal between Tehran and major powers in 2018 during his first term, after which that accord unravelled.

An IAEA official said Iran had responded to the 35-nation board's declaration by informing the U.N. watchdog that it plans to open a third uranium enrichment plant.

Enrichment can be used to produce uranium for reactor fuel or, at higher levels of refinement, for atomic bombs. Iran says its nuclear energy programme is only for peaceful purposes.

Source: Reuters

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Olivia Brooks

Economic

Commodity

China–U.S. Trade War

A range of imported household appliances including dishwashers, washing machines, refrigerators and more will be subject to President Donald Trump's expanded steel tariffs starting later this month, according to a notice posted on Thursday.

The tariffs, which are currently at 50% for most countries, would take effect on an additional range of "steel derivative products" on June 23, the Commerce Department said in the notice.

It is the second time since Trump initially ratcheted up tariffs on imported steel and aluminum, first to 25% starting in March and then to 50% this month, that his administration has expanded the list of derivative products affected by the import levies. Just before the first round of duties was set to take effect in March, they added nearly 300 product categories covering everything from horseshoes to bulldozer blades to the tariffs list.

This time eight product lines were added: combined refrigerator-freezers; small and large dryers; washing machines; dishwashers; chest and upright freezers; cooking stoves, ranges and ovens; food waste disposals; and welded wire racks.

"The tariff imposed ... will be assessed on these derivative products for the value of the steel content in each product," the Federal Register posting said.

Source: Yahoo Finance

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Manuel

Cryptocurrency

BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) expanded by about $1 billion between March 26 and June 11, representing roughly half of the $2 billion growth of the tokenized US treasuries market in the period.

According to rwa.xyz data, BUIDL’s size is $2.89 billion as of June 11. It is the largest tokenized money fund, representing 40% of the $7.34 billion market.

The March 26 benchmark is significant because it’s when Ethena Labs stopped adding the fund shares to back its USDtb stablecoin. USDtb drove most of BUIDL’s growth in 2025, channeling 90% of its reserves into the fund, totaling $1.3 billion.

Consequently, the significant 35% growth in less than three months without Ethena’s boost suggests continuing demand for regulated, high-yield cash instruments on public blockchains.

Accelerated growth of tokenized treasuries

Furthermore, the fund has grown by nearly three times since it reached $1 billion on March 13, achieving this milestone in just over a year.

However, it took less than 90 days to triple the amount, suggesting a spike in interest in real-world asset (RWA) tokenization, especially tokenized US treasuries.

According to rwa.xyz’s overview, the RWA market grew by nearly $5 billion between March 13 and June 11. The tokenized US treasuries market represented almost half of the global RWA market growth.

As shared on June 12 by ETF Store CEO Nate Geraci, BlackRock recently published its effort to bridge the traditional capital markets “with the developing digital assets ecosystem,” currently focusing on tokenized funds.

Dividend streak reaches a third monthly record

Alongside asset growth, BUIDL’s income distributions continued to set new highs. The fund paid$4.17 million in March, pushing cumulative payouts above $25 million.

April dividends rose to about $7.9 million, lifting lifetime payments past $33 million, according toissuer posts.

May distributions exceeded $10 million, bringing total dividends to more than $43 million since inception. This represented the third consecutive monthly record.

Source: Cryptoslate

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Political

Central Bank

A Republican senator’s plan to take away the Federal Reserve’s power to pay banks interest on cash they park on central bank books could cause chaos for monetary policy implementation if it were implemented, market participants said.

In recent days, Senator Ted Cruz of Texas has been speaking about this power and his desire to see it ended as part of what he views as an effort to save money by the federal government.Stripping the Fed of the longstanding power would save the government $1 trillion, Cruz said in a CNBC interview last week. The senator said then that he did not know if it was likely his effort would work but that it was certainly possible.

On Wednesday, Bloomberg reported that Cruz had also lobbied President Donald Trump, who has long been at odds with the Fed, as well as Republican colleagues, about his idea. “We’re agonizing trying to find a $50 billion cut here and there. This is over a trillion dollars, big dollars in savings,” Cruz told Bloomberg, saying of the payments, “half of it is going to foreign banks, which makes no sense.”

Cruz’s office did not respond to a request for comment. The Fed declined to comment.

Cruz's effort is being treated cautiously by Senator Tim Scott, the Republican from South Carolina who chairs the Senate Finance Committee. "While the desire to return to pre-crisis monetary policy operating procedures is understandable," the matter must be considered under normal Senate procedures, Scott said in a statement. Any move on this must start with a hearing, Scott said, adding, "this is not a decision to be rushed – it must be carefully considered and openly debated."

The Fed's power to pay banks interest, granted by Congress, took effect in 2008 as the financial crisis dawned. It quickly gained prominence as part of a large-scale overhaul of the monetary policy architecture, as the Fed confronted the greatest economic downturn since the Great Depression.

As it now stands, the Fed pays deposit-taking banks 4.4% for reserves. It uses another tool called the reverse repo facility to take in cash from money market funds and others, paying them 4.25%. Together, the two rates are designed to keep the federal funds rate, the central bank’s main tool for influencing the economy, within the desired range.

Paying financial firms for de facto loans of cash is essential for interest rate control due to the very large amount of liquidity created by bond buying stimulus efforts. During the COVID-19 pandemic, the Fed more than doubled the size of its balance sheet to a peak of $9 trillion, with asset purchases providing support to the economy beyond what the then near-zero short-term rates could deliver.

Source: Reuters

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Economic

Forex

The dollar fell to the weakest level in three years amid worries over US tariffs and the outlook for the US economy.

The Bloomberg Dollar Spot Index slid as much as 0.8% on Thursday to touch the lowest level since April 2022. The euro jumped to the strongest since 2021, while the British pound tapped a new three-year high. All currencies in the Group of 10 gained against the greenback.

The latest declines come on the heels of Thursday data that showed US producer price inflation remained muted in May, held down by tame goods and services costs, which together with other data pushed traders to bet on more interest-rate cuts by the Federal Reserve. The Fed is set to hold its next policy meeting on June 18. Earlier in the Thursday session, the dollar came under pressure as President Donald Trump said he would notify trading partners soon of unilateral levies.

“Trump renewed tariff threats are sparking concerns over US economy, which trickles down to increased bets of Fed easing,” said Helen Given, a foreign-exchange trader at Monex Inc., adding that the dollar index could fall 5% to 6% further this year.

Paul Tudor Jones, the founder of macro hedge fund Tudor Investment Corp., said the dollar may be 10% lower a year from now as he expects to see short-term rates to be cut “dramatically” in the next year.

So far in 2025, the dollar is down more than 8% as investors build up bets that Trump’s trade and tax policies will weigh on the economy. Wall Street strategists have been warning that the dollar has more room to fall, aligning themselves with speculative traders tracked by the Commodity Futures Trading Commission who hold some $12.2 billion of wagers tied to the dollar weakening further.

The concern remains that the US could experience a spike in inflation and start sliding toward a recession amid Trump’s sweeping tariffs on imports. This has investors poring over incoming economic data, especially on the labor market, to determine the path of interest rates in the US.

Recurring applications for US unemployment benefits rose to the highest since the end of 2021 in the week ended May 31, suggesting that out-of-work people are struggling to find employment. Activity at US service providers slipped into contraction territory last month for the first time in nearly a year on an abrupt pullback in demand, the Institute for Supply Management’s index of services showed.

Ahead of possible tariff impact, underlying US inflation accelerated in May by less than forecast for the fourth month in a row.

On Thursday, an auction of 30-year Treasuries drew solid demand, indicating that buyers of long-dated US government bonds see value in them despite concern that’s been mounting about spending and rising debt levels.

The dollar gauge was trading 0.6% weaker at about 4:00 p.m. in New York, curbing its earlier drop. The euro was trading at 1.1579 per US dollar at the time, after it traded as strong as 1.1631 earlier. The pound rose 0.4%, curtailing an advance of as much as 0.6%.

Strategists at a Pictet unit said they expect more weakness in the dollar over Trump’s “flip-flops” on tariffs as well as policies that could lead to a wider deficit. They forecast gains in currencies from developed economies in the coming months.

— Simon White, Markets Live Macro Strategist, London

Meanwhile, a gauge of emerging-market currencies advanced more than 6% this year as the US dollar declines.

“As we move into the second half of the year we see renewed trade policy turmoil, a clearer weakening of the labor market and a shift from the Fed to more dovish communications,” analysts at MUFG, including Derek Halpenny, Lee Hardman and Lin Li, wrote in June FX Outlook. “That will be the catalyst for further dollar depreciation in the second half of 2025 and into 2026.”