Israel Subject To Unprecedented Pressure From Allies Over Gaza Escalation

Political

Latest news on the Israeli-Palestinian conflict

Summary:

The United Kingdom on Tuesday suspended its free-trade agreement negotiations with Israel over the growing Gaza crisis, and after British Prime Minister Keir Starmer expressed disgust at newly expanded Israeli military operations in the Gaza Strip, also as famine threats at least 500,000 Palestinians.

Starmer described that he and his French and Canadian counterparts are "horrified" by the Netanyahu government's escalation in Gaza. This also comes as international headlines and warnings grow more dire. For example Al Jazeera has the following new headline: "Starving Palestinians resort to eating animal feed, flour mixed with sand".

"We repeat our demand for a ceasefire as the only way to free the hostages, we repeat our opposition to settlements in the West Bank, and we repeat our demand to massively scale up humanitarian assistance into Gaza," Starmer told parliament.

David Lammy with Israeli President Isaac Herzog

A Monday joint statement by the UK, France and Canada had threatened sanctions on Israel. Britain further did slap targeted sanctions on Israeli settler groups and individuals.

Later on Tuesday, Foreign Secretary David Lammy voiced agreement with Starmer, saying that Israel’s actions are "morally wrong" and "unjustifiable." He also said of the fresh sanctions, "I have seen for myself the consequences of settler violence. The fear of its victims. The impunity of its perpetrators."

In announcing the pause in free-trade agreement negotiations, Lammy further revealed that the Israeli ambassador had been summoned. Britain is reportedly demanding the full resumption of humanitarian aid deliveries to the Gaza Strip.

Responding to shadow foreign secretary Priti Patel, Lammy told parliament:

I think the whole house should be able to utterly condemn the Israeli government’s denial of food to hungry children. It is wrong. It's appalling.

Opposing the expansion of a war that has killed thousands of children is not rewarding Hamas. Opposing the displacement of 100,000s of civilians is not rewarding Hamas. On this side of the house, we are crystal clear that what is happening is morally wrong, unjustifiable, and it needs to stop.

Starting Friday the Israel Defense Forces (IDF) announced an expanded mobilization of troops for operation 'Gideon's Chariots'. Some two million Palestinians are expected to be forced into a "humanitarian zone" while most of the enclave is destroyed and flattened.

The policy somewhat contradicts Trump's main messaging during last week's Gulf tour, wherein he emphasized peace through deal-making, and not 'chaos' in the war-torn Middle East.

This is probably the most pressure Israel has come under from its Western allies since Oct.7, 2023. As we previously reported, even Vice President JD Vance abruptly canceled a planned trip to Israel following the Netanyahu government's declaration that it would ramp up operations to conquer all of Gaza.

Meanwhile the domestic policy fight within Israel has been ramping up too...

Axios had written that "The US official said Vance made the decision because he didn't want his trip to suggest the Trump administration endorsed the Israeli decision to launch a massive operation at a time when the U.S. is pushing for a ceasefire and hostage deal."

Neither the US nor UK have every fully cut funding or arms transfers to Israel for any reason, and are unlikely to ever escalate to that point, no matter how tense relations become.

Source: Zero Hedge

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Adam

Commodity

Oil prices eased as broader financial markets weakened, while uncertainty about whether sanctions on Iran will be loosened or tightened injected choppiness into the session.

Prices whipsawed earlier in the session after Iran’s supreme leader expressed skepticism over discussions with the US, further denting expectations of an agreement on his country’s nuclear program. Ayatollah Ali Khamenei said he doesn’t think negotiations with the US will succeed and urged the Trump administration to stop “talking nonsense.”

He added he doesn’t know what will happen in any discussions.

US West Texas Intermediate’s most-active July futures contract traded below $62 a barrel. Brent briefly jumped to touch $66 after the comments, before erasing gains to edge lower near $65 a barrel.

Oil prices have been volatile since last week on a host of contrasting headlines around the fate of Iran-US talks. A deal could pave the way for more barrels to return to a market that’s expected to be oversupplied later in the year, though Tehran has pumped at significantly higher levels under the current round of sanctions than previous ones.

Oil's Choppy Trading

Crude swings on comments about Iran nuclear talks

Crude has rebounded this month, after sliding 19% in April, following an easing in the trade war between the US and China . However, any indication of a reduction of sanctions on Russia, or fellow OPEC+ producer Iran, could potentially add more barrels to a global market that is already facing a glut this year.

Adding to global uncertainty, US President Donald Trump is pulling back from his efforts to end the war between Ukraine and Russia.

Traders are “adopting a wait-and-see mode given conflicting news flows,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Still somewhat concerned that we have seen most of the risk-on rally for now, with the potential for markets souring again, thereby adding some downward pressure on prices.”

Elsewhere, ConocoPhillips Chief Executive Officer Ryan Lance said

he doesn’t think US shale output has peaked. Prices in the $50s on a sustained basis would lead to a slow decline, but in the $60s, output will just plateau, he added. Traders have been watching for signs of the effect of lower oil prices on US supply.

In bullish sign for prices, premiums

of several refined fuels over crude have surged over recent weeks, potentially bolstering demand for crude oil.

source : bloomberg

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Adam

Commodity

Natural Gas Futures Bounce After Technical Support Holds and Traders Reposition

U.S. natural gas futures rose early Tuesday after technical support held near the 200-day moving average, prompting bargain hunters and short-covering ahead of key contract expirations.

The June Nymex contract rebounded after testing critical levels, with traders recalibrating positions amid shifting near-term weather expectations and market catalysts.

Did Support at the 200-Day Moving Average Trigger the Bounce?

After four straight sessions of losses, natural gas futures found support at $3.107, narrowly above Monday’s $3.098 low and just ahead of the April 24 swing bottom at $3.035. That rebound came after an attempted breakdown below the 200-day moving average at $3.163 failed, triggering buying interest.

Resistance now sits overhead at $3.438, presenting the next technical hurdle for bulls. The strong reaction off key support suggests traders were waiting for a retracement to enter on the long side, capitalizing on discounted prices.

Weather Outlook Points to Weak Near-Term Demand

The May 19–25 forecast shows a mixed weather pattern. Systems are moving across the northern two-thirds of the country, keeping highs in the 50s–70s, while the South sees early-week warmth in the 80s–90s. However, a transition midweek will bring cooling to much of the East and Midwest, just as a hot ridge forms out West with highs in the 70s–100s.

Despite the brief southern heat, overall national demand is projected to remain light through the week. The most recent weather model revisions trended cooler for late May into early June, boosting heating degree days (HDDs), though this late-season increase adds limited demand. Cooling degree days (CDDs) drop off after a brief early-week spike, muting overall bullish weather signals.

How Are Traders Positioning Ahead of Memorial Day and Contract Expiration?

Much of the current movement appears driven more by positioning than fundamentals. Eli Rubin of EBW Analytics highlighted that prices are likely to remain heavily influenced by trader positioning heading into the Memorial Day holiday, as well as the expiration of the June contract.

With options expiration and final settlement approaching next week, market participants are adjusting exposure, contributing to short-term volatility and price swings. Bargain buying and short covering are helping to stabilize the front-month contract after a technically driven pullback.

Short-Term Outlook: Bullish Rebound Faces Resistance

The technical bounce above key support, combined with short-term positioning and contract-related flows, points to a mildly bullish near-term outlook. However, weather-related demand remains weak, and any rally will likely face resistance near $3.438 unless fundamentals materially improve. Traders should monitor weather updates, especially CDD forecasts, and watch for positioning flows leading into the long weekend and contract expiry.

Source: fxempire

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Thomas

Economic

Here is a summary of the major elements of the package, along with the impact on the budget over the next 10 years of the plan, as estimated by the Joint Committee on Taxation and the Congressional Budget Office.

TAX CUTS AND EXEMPTIONS

Makes permanent the lower income tax rates in Trump's 2017 Tax Cuts and Jobs Act that are currently due to expire at the end of 2025. (Cost: $2.2 trillion)

Extends the increased alternative minimum tax exemption. (Cost: $1.4 trillion)

Extends the standard deduction and boosts it by an additional $1,000 to $1,500 until 2029. (Cost: $1.3 trillion)

Extends and increases tax break for owners of "pass-through" businesses, such as sole proprietorships and LLCs (Cost: $809 billion)

Expands the Child Tax Credit to $2,500 from $1,000 until 2029, and keeps it at $2,000 after that, indexed to inflation. (Cost: $797 billion)

Raises the estate tax exemption from $14 million to $15 million. (Cost: $212 billion)

Extends tax breaks for multinational corporations. (Cost: $174 billion)

Exempts taxes on overtime pay until 2029. (Cost: $124 billion)

Extends other 2017 business tax breaks. (Cost: $99 billion)

Creates a new $4,000 deduction for seniors. (Cost: $72 billion)

Exempts taxes on interest payments on loans for domestic autos until 2029. (Cost: $58 billion)

Exempts taxes on some tipped income until 2029. (Cost: $40 billion)

Exempts up to $5,000 for contributions to scholarship funds for private schools. (Cost: $20.4 billion)

Allows parents to contribute up to $5,000 tax-free each year to "MAGA Accounts" to be used for a child's school and other costs when they reach adulthood. (Cost: $17.2 billion)

Allows taxpayers to deduct up to $30,000 for state and local tax payments, up from $10,000 now. (Additional revenue relative to pre-2017 tax code, when there was no limit: $916 billion)

SAVINGS AND NEW REVENUES

Extends 2017 elimination of personal exemption deduction. (Savings: $1.9 trillion)

Ends tax breaks for electric vehicles, clean electricity and green energy. Phases out a tax break for nuclear power starting in 2029. (Savings: $916 billion)

Restricts health benefits for some immigrants. (Savings: $117 billion)

Imposes stricter eligibility requirements for Affordable Care Act exchange coverage. (Savings: $82 billion)

Raises taxes on the biggest private university endowments from 1.4% to 21%. (New revenue: $22.6 billion)

Imposes a new 5% tax on funds sent by immigrants to their home countries. (New revenue: $22.2 billion)

Eliminates taxes on firearm silencer sales . (Cost: $1.4 billion)

Gives the government the power to end the tax-exempt status of "terrorist-supporting organizations."

TOTAL COST OF TAX CUTS: $5.6 TRILLION

MEDICAID

Requires able-bodied adults who have no dependents to work, volunteer or be in school at least 80 hours a month starting in 2029.

Bolsters verification efforts that check whether participants and healthcare providers are eligible to participate, and removes rules that make it easier to enroll.

Excludes non-citizens from the program and penalizes states that use their own funds to provide coverage to illegal immigrants.

Blocks regulations that required minimum staffing levels at nursing homes and other long-term care facilities.

Prohibits funding for gender transition therapies for minors.

Prohibits payments to large providers like Planned Parenthood that specialize in birth control, abortion and other reproductive health services.

Limits state taxes on providers that are used to raise the federal government's contribution.

TOTAL SAVINGS: $715 billion. Enrollment would drop by at least 7.7 million people from its current level of 71 million people.

ENERGY, ENVIRONMENT, COMMUNICATIONS

Cancels funding for green-energy grant programs in the 2022 Inflation Reduction Act, including vehicle manufacturing, home efficiency upgrades, electricity transmission, wind power.

Creates incentives for pipelines, natural gas exports and exploration.

Repeals grant programs for purchasing electric heavy-duty vehicles.

Repeals grants to reduce air pollution, greenhouse gas emissions.

Repeals fuel-efficiency standards for automobiles and pickup trucks.

Makes more electromagnetic spectrum bands for communication available for auction.

Prohibits states from regulating artificial intelligence.

TOTAL SAVINGS: $197 billion

HOMELAND SECURITY

Border wall construction (Cost: $46.5 billion)

Surveillance towers, drones and other border-security equipment (Cost: $6.3 billion)

Increase staffing at U.S. Customs and Border Protection from 46,400 to 55,000 (Cost: $6.2 billion)

Increase law enforcement protection of the president (Cost: $300 million)

TOTAL COST: $67 billion

IMMIGRATION AND JUSTICE

Imposes new fees of up to $5,000 for immigrants' work permits, court hearings, applications for asylum and other matters.

Provides funding to hire 10,000 new immigration enforcement officers, and funding for 1 million more deportations.

Provides additional funds for government agencies to investigate visa fraud, run criminal background checks and DNA testing, and supervise unaccompanied children.

Prevents federal courts from enforcing contempt citations related to injunctions or temporary restraining orders against the government.

TOTAL SAVINGS: $110 billion

MILITARY

Increase spending on shipbuilding (Cost: $32 billion)

Air and missile defense (Cost: $24 billion)

Munitions (Cost: $19.5 billion)

Nuclear weapons (Cost: $12.6 billion)

Border security (Cost: $5 billion)

TOTAL COST: $144 billion

FOOD ASSISTANCE

Increased work requirements for some of the 41 million participants in the SNAP food aid program

Shift some costs from federal government to states starting in 2028

SAVINGS: $230 billion

EDUCATION

Changes student loan repayment plans (Savings: $295 billion)

Imposes borrowing limits for some student loan programs (Savings: $51 billion)

Tightens eligibility for Pell Grants (Savings: $8 billion)

Limits the government's ability to cancel student debt (Savings: $32 billion)

TOTAL SAVINGS: $349 billion

Source: TradingView

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Adam

Stocks

Wall Street’s main indexes fell on Tuesday, with technology stocks leading declines as investors awaited commentary from Federal Reserve officials to gauge the impact of U.S. President Donald Trump’s tariffs on the central bank’s policy path.

At least seven Fed officials including St. Louis Fed President Alberto Musalem are scheduled to speak through the day.

Traders currently expect at least two 25-basis-point rate cuts from the U.S. Federal Reserve by the end of 2025, with the first one expected in September, according to data compiled by LSEG.

Fed officials on Monday flagged the ramifications of the latest downgrade of the U.S. government’s sovereign credit rating and uneasy market conditions.

"The Fed is trying to not have (tariffs) influence what they do and they’ve said so," said Thomas Martin, senior portfolio manager at Globalt Investments.

"They certainly don’t want to raise (interest rates), and so standing pat is a pretty good thing to do."

At 09:41 a.m. ET, the Dow Jones Industrial Average fell 80.50 points, or 0.19%, to 42,711.57, the S&P 500 lost 20.34 points, or 0.34%, to 5,943.26, and the Nasdaq Composite lost 86.45 points, or 0.45%, to 19,129.01.

Eight of the 11 S&P sub-sectors traded lower, with information technology, which was down 0.7%, being the worst hit.

Most megacap and growth stocks fell, though Tesla (NASDAQ:TSLA) was an outlier with a 3.4% rise after Elon Musk said at an economic forum in Qatar that he was still committed to being the company’s CEO in five years’ time.

Retailer Home Depot (NYSE:HD) gained 1.1% after beating Wall Street estimates for first-quarter sales.

Amer Sports jumped 18.4% after raising its 2025 revenue forecast.

If current losses hold, the S&P 500 is set to snap a six-day winning streak and the Nasdaq is on pace for its first loss in three sessions.

The S&P 500 ended flat on Monday as investors assessed the implications of Moody’s downgrading the U.S. sovereign credit rating to "Aa1" from a pristine "Aaa", citing the government’s $36-trillion outstanding debt and interest.

Concerns around mounting U.S. debt remained in focus, with a vote on Trump’s sweeping tax-cut bill in the House of Representatives expected this week.

"We have a tremendously unified party," Trump told reporters as he arrived at Capitol Hill on Tuesday to encourage Republican lawmakers to resolve their differences over the bill that encompasses much of his domestic agenda.

U.S. stocks have had a solid month so far, with the S&P 500 now more than 17% higher than its April lows, when global markets were jolted by Trump’s reciprocal tariffs.

A pause in the tariffs, a temporary trade truce between the U.S. and China and tame inflation data pushed equities higher, although the S&P 500 is still about 3% from its record highs.

Preliminary readings of the May Purchasing Managers Index are due later in the week.

AI-darling Nvidia (NASDAQ:NVDA) is scheduled to report quarterly earnings on May 28.

Declining issues outnumbered advancers by a 1.84-to-1 ratio on the NYSE and by a 1.71-to-1 ratio on the Nasdaq.

The S&P 500 posted eight new 52-week highs and no new lows, while the Nasdaq Composite recorded 23 new highs and 11 new lows.

Source: investing

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Daniel Carter

Economic

Political

President Donald Trump on Tuesday pushed back on demands from Republicans who have threatened to sink his giant tax bill if the legislation does not significantly boost the state and local tax deduction, lawmakers said.

In a private meeting with House Republicans, Trump singled out the lawmakers from New York, New Jersey and California who have rejected the $30,000 deduction limit — three times the current cap — contained in the legislation moving through the House.

“He wants to leave it where it is, that's basically what he said,” Representative Bruce Westerman of Arkansas said of the SALT provision in the bill after the meeting.

“The president was incredibly forceful,” Representative Dusty Johnson of South Dakota said. “He made it very clear we need to stop screwing around and pass the bill.”

The confrontation came moments after Trump told reporters the SALT deduction benefits Democratic states and politicians, signaling that the tax break, which predominately affects high-tax states like New York, New Jersey and California, isn't a central concern of Republicans.

“It's not a question of holdouts. We have a tremendously unified party,” Trump said Tuesday before meeting with lawmakers. “There’s some people that want a couple of things that maybe I don't like or that they're not going to get.”

Still, Trump has repeatedly pledged bigger SALT deductions, which were limited in his first-term tax cut bill. A faction of Republicans from high-tax states have threatened to sink Trump's agenda over SALT. Trump, however, shrugged off those concerns.

During the meeting with House Republicans, the president spoke individually with holdouts both from high-tax states and conservative hardliners who have been insisting on deeper cuts to Medicaid and other safety-net programs to urge them to drop their demands, Representative Lauren Boebert of Colorado said.

But at least some of the ultraconservatives weren't swayed by Trump and were sticking to their demands.

“We aren't doing enough on Medicaid,” House Freedom Caucus Chairman Andy Harris said after the meeting. The Maryland lawmaker said he would still oppose the tax bill as written.

“I'm not worried about the timeline so much that I'm worried about the product,” added Representative Andy Biggs, a Republican hardliner from Arizona.

House Speaker Mike Johnson met with SALT holdouts late Monday, but left without an agreement.

Source: Yahoo Finance

To stay updated on all economic events of today, please check out our Economic calendar

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Warren Takunda

Cryptocurrency

Key takeaways:

Bitcoin is nearing a golden cross that led to 45–60% price rallies in the recent past.

Fundamentals like rising M2 supply and easing trade tensions support a bullish outlook.

Bearish divergence and overbought conditions show there’s still a risk of BTC falling below $100,000.

Bitcoin will likely confirm a “golden cross” on its daily chart by the end of May, a technical pattern whose occurrences in recent years often preceded rallies. Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_1

Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_1

Source: Benjamin Cowen

Previous golden crosses led to 45-60% BTC price rallies

As of May 20, Bitcoin’s 50-day simple moving average (50-day SMA; the red wave) was eyeing a close above its 200-day SMA (the blue wave) for the first time since October 2024, forming a golden cross. Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_2

Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_2

BTC/USD daily price chart. Source: TradingView

Previously, BTC price had gained over 60%, with the reelection of Donald Trump as the US president playing a key role.

In October 2023, the golden cross was followed by a 45% BTC price rally, helped by Bitcoin ETF euphoria. September 2021 saw 50% gains in BTC price after painting a similar SMA crossover.

Bitcoin’s golden crosses can fail

Using indicators that worked in the past is not a guaranteed strategy.

Traders learned that in February 2020, when Bitcoin’s golden cross preceded a 62% price crash, primarily due to the global market rout led by the COVID-19 lockdowns. Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_3

Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_3

BTC/USD daily price chart. Source: TradingView

That episode underscores the importance of using golden crosses with broader technical and macro indicators while factoring in the possibility of unexpected events.

As of now, Bitcoin’s upcoming golden cross aligns with mostly supportive fundamentals, placing the signal on the bullish side of the ledger.

Increasing M2 money supply and easing US-China trade tensions, for instance, have propelled bets on a new record high for Bitcoin. Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_4

Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_4

Source: Michaël van de Poppe

What’s notable this time is that BTC is signaling a correction after its relative strength index (RSI) crossed above the overbought threshold of 70 earlier in May.

So, instead of an immediate rally after the cross, Bitcoin may initially pull back toward its SMA supports, sitting around the $92,400-95,000 range as of May 20. Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_5

Bitcoin Is Signaling a Golden Cross — What Does It Mean for BTC Price?_5

BTC/USDT daily price chart. Source: TradingView

A growing bearish divergence between the rising Bitcoin price and falling RSI furthers the chances of short-term downside. Nonetheless, some technical indicators see the BTC price rallying toward $150,000 in the coming months.