US Halts Some Missile Shipments to Ukraine, Sparking Worry in Kyiv

Political

Summary:

A decision by Washington to halt some shipments of critical weapons to Ukraine triggered warnings in Kyiv on Wednesday that the move would weaken its ability to defend against intensifying Russian air strikes and battlefield advances.

Ukraine said it had called in the acting U.S. envoy in Kyiv to stress the importance of continuing military aid from Washington, saying any cut-off would embolden Russia as diplomatic efforts to end the war falter.

The Pentagon's pause due to concerns that U.S. stockpiles are too low came in recent days and includes precision munitions and air defence interceptors that knock down Russian drones and missiles, two people familiar with the decision said on Tuesday.

"The Ukrainian side emphasised that any delay or procrastination in supporting Ukraine's defense capabilities will only encourage the aggressor to continue the war and terror, rather than seek peace," Kyiv's foreign ministry said in a statement.

Ukraine's defence ministry said it had not been officially notified of any halt in U.S. shipments and was seeking clarity from its American counterparts.

Dozens of people have been killed in recent weeks during air strikes on Ukrainian cities, including the capital Kyiv, that have involved hundreds of attack drones in addition to ballistic and cruise missiles.

Russian forces, which control about a fifth of Ukraine, have also made gains in a grinding summer campaign in the east.

Since U.S. President Donald Trump took office in January, he has softened Washington's position toward Russia, seeking a diplomatic solution to the war and raising doubts about future U.S. military support for Kyiv's war effort.

Last week, Trump said he was considering selling more Patriot air defense missiles to Ukraine following a meeting with President Volodymyr Zelenskiy.

Politico, which reported the pause on Tuesday, said it includes the critical Patriot air defence missiles which Ukraine has relied on to destroy fast-moving ballistic missiles.

Fedir Venislavskyi, a member of the Ukrainian parliament's national security and defense committee, called the decision to halt the shipments "very unpleasant for us".

"It's painful, and against the background of the terrorist attacks which Russia commits against Ukraine, it's a very unpleasant situation," he told reporters in Kyiv.

In an email, the Pentagon said it was providing Trump with options to continue military aid to Ukraine in line with the goal of ending Russia's war there.

"At the same time, the department is rigorously examining and adapting its approach to achieving this objective while also preserving U.S. forces' readiness for administration defense priorities," said Elbridge Colby, the undersecretary for policy.

All weapons aid was briefly paused in February with a second, longer pause in March. The Trump administration resumed sending the last of the aid approved under Biden but no new policy has been announced.

The Kremlin on Wednesday welcomed the news of a halt, saying the conflict would end sooner if fewer arms flowed to Ukraine.

CONCERN IN KYIV

Residents in the Ukrainian capital, where missile strikes on residential neighbourhoods over the past two weeks had killed more than two dozen people, expressed alarm at the Pentagon's decision.

"If we end up in a situation where there's no air defence left, I will move (out of Kyiv), because my safety is my first concern," Oksana Kurochkina, a 35-year-old lawyer told Reuters in central Kyiv.

"I am already having thoughts about moving out now."

On the battlefield, a halt in precision munitions would limit the capacity of Ukrainian troops to strike Russian positions farther behind the front line, said Jack Watling, a military analyst at the Royal United Services Institute.

"In short, this decision will cost Ukrainian lives and territory."

Source: Reuters

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Adam

Stocks

Market Overview

Stock futures inch higher Wednesday after investors initiated the second half of 2025 with a tech sector rotation. S&P 500 Index futures trade marginally higher, while Nasdaq 100 futures advance 0.3% and Dow Jones Industrial Average futures add 69 points.

Tuesday’s regular session saw the Dow surge 400 points on healthcare and materials strength, while the S&P 500 slipped 0.1% and the Nasdaq Composite dropped 0.8% as traders dumped high-flying technology names.

The information technology sector lost over 1% Tuesday, with communications services also declining as investors rotated away from second-quarter leaders including Nvidia, Palantir, and Advanced Micro Devices.

Healthcare and materials sectors drove gains, with Amgen, Johnson & Johnson, and UnitedHealth lifting the blue-chip index.

Fed Chair Powell’s cautious rate stance continues to influence market sentiment, reiterating plans to “wait and learn more” about tariff impacts on inflation before cutting rates.

Key Economic Releases

ADP Private Payrolls – 12:15 GMT Consensus: 120,000 jobs added (vs. 37,000 prior) This sharp anticipated increase from May’s weak 37,000 gain could signal labor market stabilization ahead of Thursday’s critical Non-Farm Payrolls report. A strong reading would support Fed hawkishness and potentially pressure rate cut expectations.

Central Bank Activity

Federal Reserve Chair Jerome Powell maintains his cautious approach on rate cuts, emphasizing the need to assess tariff impacts on inflation before policy changes. This stance directly contradicts President Trump’s calls for immediate and deep rate reductions, adding to market uncertainty as Trump’s 90-day tariff pause expires next week.

Commodities, Crypto, and Bonds

Gold prices edge lower as investors await U.S. payroll data while weighing Powell’s cautious rate stance. A weaker dollar provides some support for the greenback-priced metal, limiting downside pressure.

Oil futures remain little changed ahead of this week’s OPEC+ meeting to determine August output levels. Chinese factory activity expansion in June boosted demand expectations for the world’s largest oil importer.

U.S. Treasury yields climbed Tuesday after Senate Republicans passed Trump’s tax-and-spending legislation, threatening to add at least $3 trillion to the federal deficit over the next decade. The 10-year yield rose as bond markets digest the fiscal implications, with the House now facing uncertainty over GOP support amid deficit concerns.

Technical Outlook

S&P 500 Index Futures Hold Above Key Support

Daily E-mini S&P 500 Index

S&P 500 Index futures last traded at 6,247.75, well above the 200-day moving average at 5,978.19 and the 50-day moving average at 5,931.60. Resistance sits at 6,288.75.

Nasdaq 100 Index Futures Test Recent Highs

Daily E-mini Nasdaq 100 Index Futures

Nasdaq 100 Index futures trade at 22,694.50, above the 50-day moving average at 21,350.4 and 200-day moving average at 21,226.83. Resistance at 22,934.75.

Dow Jones Index Futures Consolidate Near Highs

Daily E-mini Dow Jones Industrial Average

Dow Jones Index futures trade at 44,809, above the 200-day moving average at 43,503 and the 50-day moving average at 42,455.60. Resistance at 46,326.

Outlook

Today’s focus centers on ADP payrolls at 12:15 GMT as a preview to Thursday’s main event jobs report in this holiday-shortened week. The tech sector rotation continues reshaping market leadership as investors reassess valuations entering the second half.

Trump’s fiscal package uncertainty, combined with Powell’s measured Fed approach and expiring tariff pause, creates multiple volatility catalysts.

Healthcare and materials sectors maintain momentum from Tuesday’s rotation, while technology names face continued selling pressure.

Technical patterns across all three major index futures suggest consolidation near key levels as markets digest the employment data changes.

Source: fxempire

Risk Warnings and Disclaimers

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Warren Takunda

Economic

Republican leaders in the House are sprinting toward a Wednesday vote on President Donald Trump’s tax and spending cuts package, determined to seize momentum from a hard-fought vote in the Senate while essentially daring members to defy their party’s leader and vote against it.

“The American people gave us a clear mandate, and after four years of Democrat failure, we intend to deliver without delay,” the top four House GOP leaders said Tuesday after the bill passed the Senate 51-50, thanks to Vice President JD Vance’s tiebreaking vote.

It’s a risky gambit, one designed to meet Trump’s demand for a July 4 finish — and there’s a steep climb ahead. Since launching early this year, Republicans have struggled mightily with the bill nearly every step of the way, often succeeding by only one vote. Their House majority stands at just 220-212, leaving little room for defections.

Some Republicans are likely to balk at being asked to rubber stamp the Senate bill less than 24 hours after passage, having had little time to read or absorb the changes that were made, many at the last minute to win the vote of Alaska Sen. Lisa Murkowski.

House Republicans from competitive districts have bristled at the Senate bill’s cuts to Medicaid, while conservatives have lambasted the legislation as straying from their fiscal goals.

It falls to Speaker Mike Johnson and his team to convince them that the time for negotiations is over.

Trump pushes Republicans to do ‘the right thing’

The bill would extend and make permanent various individual and business tax breaks that Republicans passed in Trump’s first term, plus temporarily add new ones Trump promised during the campaign, including allowing workers to deduct tips and overtime pay, and provide a new $6,000 deduction for most older adults. In all, the legislation contains about $4.5 trillion in tax cuts over 10 years.

The bill also provides $350 billion for defense and Trump’s immigration crackdown. Republicans partially pay for it all through less spending on Medicaid and food assistance. The Congressional Budget Office projects it will add about $3.3 trillion in federal deficits over the coming decade.

The House passed its version of the bill in May, despite worries about spending cuts and the overall price tag. Now, it’s being asked to give final passage to a version that, in many respects, exacerbates those concerns. The Senate bill’s projected impact on federal deficits, for example, is significantly higher.

Trump praised the bill profusely in a social media post, saying, “We can have all of this right now, but only if the House GOP UNITES, ignores its occasional ‘GRANDSTANDERS’ (You know who you are!), and does the right thing, which is sending this Bill to my desk.”

The high price of opposing Trump’s bill

Speaker Johnson, R-La., is intent on meeting the president’s July 4 timeline. He’s also betting that hesitant Republicans won’t cross Trump because of the heavy political price they would have to pay.

They need only look to Sen. Thom Tillis, R-N.C., who announced his intention to vote against the legislation over the weekend. Soon, the president was calling for a primary challenger to the senator and personally attacking him on social media. Tillis quickly announced he would not seek a third term.

Others could face a similar fate. One House Republican who has staked out opposition to the bill, Rep. Thomas Massie of Kentucky, is already being targeted by Trump’s well-funded political operation.

House Majority Leader Steve Scalise, R-La., said leadership was not entertaining the possibility of making changes to the bill before the final vote. He said the two chambers already agree on the vast majority of what’s in it.

“It’s not as easy as saying, ‘Hey, I just want one more change,’ because one more change could end up being what collapses the entire thing,” Scalise said.

Democratic lawmakers, united against the bill as harmful to the country, condemned the process as rushed. Rep. Jim McGovern, D-Mass., said there’s no real deadline for getting the bill passed by July 4.

“We’re rushing not because the country demands it but because he wants to throw himself another party,” McGovern said. “This isn’t policy. It’s ego management.”

Democrats warn health care, food aid are being ripped away

House Democratic leader Hakeem Jeffries described the bill in dire terms, saying cuts in Medicaid spending would result in “Americans losing their lives because of their inability to access health care coverage.” He said Republicans are “literally ripping the food out of the mouths of children, veterans and seniors.”

“House Democrats are going to do everything we can for the next few hours, today, tomorrow, for the balance of this week and beyond to stop this bill from ever becoming law,” Jeffries said.

Republicans say they are trying to rightsize the safety net programs for the population they were initially designed to serve, mainly pregnant women, the disabled and children, and root out what they describe as waste, fraud and abuse.

The package includes new 80-hour-a-month work requirements for many adults receiving Medicaid and applies existing work requirements in the Supplemental Nutrition Assistance Program, or SNAP, to more beneficiaries. States will also pick up more of the cost for food benefits, with the amount based on their payment error rates, which include underpayments and overpayments.

The driving force behind the bill, however, is the tax cuts. Many expire at the end of this year if Congress doesn’t act.

“Passing this bill means smaller tax bills and bigger paychecks for the American people — permanently,” said Senate Majority Leader John Thune. “It will also help get our economy firing on all cylinders again.”

The Tax Policy Center, which provides nonpartisan analysis of tax and budget policy, projected the bill would result next year in a $150 tax break for the lowest quintile of Americans, a $1,750 tax cut for the middle quintile and a $10,950 tax cut for the top quintile. That’s compared with what they’d face if the 2017 tax cuts expired.

Source: AP

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Risk Warnings and Disclaimers

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Glendon

Economic

Forex

If the Trump administration’s tariff policies result in higher overall inflation, a scenario that will play out in the coming weeks, the question is who will pay for it. A surge in prices will presumably raise the cost of doing business. Less clear is whether and to what extent companies will pass on those higher costs to consumers.

Any inflationary impact from tariffs should first show up in the Producer Price Index, which reflects changes in the cost of producing goods and services sold to consumers. Over time, producer inflation is passed on to consumers and shows up in the better-known Consumer Price Index.

The PPI and CPI’s long history shows that the two are closely related. They’ve grown at roughly similar rates — the PPI by 2.8% a year since 1913 through May and the CPI at a slightly higher rate of 3.2% a year. Annual changes in the two indexes have also been highly correlated over that time (0.8, counting monthly). The relationship was as strong during the past 30 years (0.81), marked by the increasing globalization of trade, as it was during the first three decades of the data series (0.79). That long and consistent history supports the intuition that in the long run, businesses do — indeed, must — pass on their higher costs to consumers.

Looking at shorter periods, however, the numbers tell a more nuanced story. The first thing that jumps out is that annual changes in the PPI have been twice as volatile as those of the CPI, as measured by annualized standard deviation. This suggests that businesses have routinely shielded consumers from much of the turbulence in producer inflation.

Notably, most of that shielding occurred when producer inflation spiked. The median annual change in PPI was 2.3% since 1913. During 12-month periods when producer inflation was lower than the median, roughly half the time, CPI outpaced PPI more than 90% of the time and by a median of 2.2 percentage points. But when annual producer inflation was higher than 2.3%, it was just the opposite. On those occasions, PPI outstripped CPI more than 70% of the time and by a median of 1.6 percentage points. The results are nearly identical when annual changes in PPI and CPI are compared on a six- or 12-month lag.

In other words, the higher the inflation, the more likely businesses were to absorb most of the higher cost, at least in the near term, and vice versa. One way to understand that divergence is that there may be a limit to how much price inflation consumers can digest at one time. It would explain why businesses seem to have little trouble passing on their own higher costs to consumers in normal inflation environments but struggle to do so when inflation spikes.

Companies may also have a strategic incentive to internalize cost surges given competing considerations of volume and margin. Raising prices would protect profit margins in the near term but could imperil them down the road if higher prices result in lower volume and market share. Passing on higher costs to consumers gradually might be a way to protect both, particularly if companies have margin to spare. Fortunately, many big US companies do — the profit margin for the S&P 500 Equal Weight Index is near an all-time high and expected to grow this year and next.

That may explain why the stock market has been so sensitive to tariff news this year. The White House’s Liberation Day announcement was greeted with one of the worst two-day US stock market routs on record, while tariff delays were routinely celebrated with surging stock prices. The seemingly single-minded focus on levies makes sense if companies have the most to lose.

One countervailing consideration is that heightened inflation expectations may give companies more room than usual to raise prices. A notable outlier in the data is that during the hyper inflationary years of the late 1970s and early 1980s, CPI mostly kept pace with PPI despite double-digit producer inflation. Businesses may have been able to raise prices more aggressively because consumers had come to expect big price hikes. Memories of the pandemic’s price surge are a big reason Federal Reserve Chair Jerome Powell has called for caution on cutting interest rates until the implications of tariffs are more clear. With inflation expectations for next year nearly double the long-term inflation rate, businesses may be able to push costs to consumers more quickly.

The PPI and CPI don’t overlap perfectly, so they can only be a rough guide to the way businesses and consumers navigate higher prices. But given the behavior of producer and consumer inflation during previous periods of surging prices, don’t be surprised if any tariff-related inflation is initially absorbed mostly by companies.

Source: Bloomberg Europe

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

Risk Warnings and Disclaimers

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Adam

Economic

Wall Street stock index futures were subdued on Wednesday as investors weighed U.S. trade negotiations ahead of President Donald Trump's July 9 tariff deadline and awaited payrolls data for hints on the monetary policy path.

The Nasdaq and the S&P 500 closed lower in the previous session, pausing after a record run driven by optimism about the U.S. striking trade deals with its key partners as well as expectations of deeper interest-rate cuts to come.

Trump said on Tuesday he was not thinking of extending the July 9 deadline for imposing tariffs and expressed doubts that an agreement could be reached with Japan, although he said he expected a deal with India. The European Union's trade chief is expected to hold talks this week with peers in Washington.

Tech stocks came under selling pressure a day earlier as Treasury yields climbed after data showed stronger-than-expected job openings in May, signaling a resilient labor market and underlining the U.S. Federal Reserve's stance of being patient about lowering borrowing costs.

"For now, the most reasonable scenario is that inflation will start to rise, and the data is pointing in that direction. That message is finally — if slowly — sinking in, even among some of the Fed doves," said Ipek Ozkardeskaya, senior analyst, Swissquote Bank.

Traders are pricing in about 64 basis points worth of rate cuts this year from the Fed, with the odds of the first reduction in July at 19.1%, according to data compiled by LSEG.

Focus now turns to the monthly non-farm payrolls report, scheduled for release on Thursday - a day earlier than usual, as markets are closed on Friday for Independence Day. The reading is expected to show U.S. job growth cooled in June and the unemployment rate ticked up to 4.3%, according to a Reuters poll of economists.

ADP's private payrolls data for June is due at 08:15 a.m. ET.

Meanwhile, U.S. Senate Republicans passed Trump's massive tax-and-spending bill on Tuesday by the narrowest of margins, advancing a package that would slash taxes, reduce social safety net programs and boost military and immigration enforcement spending, while adding $3.3 trillion to the national debt.

The legislation now heads to the House of Representatives for possible final approval, although a handful of Republicans have already opposed some of the Senate provisions.

By 7:00 a.m. ET (1100 GMT), S&P 500 E-minis were up 4.75 points, or 0.08%, Nasdaq 100 E-minis were down 12.25 points, or 0.05%, and Dow E-minis were up 79 points, or 0.18%.

The blue-chip Dow closed 1.3% below its record high touched in December.

Among single stocks, Centene tumbled 26.6% premarket after the health insurer said it had withdrawn its 2025 earnings forecast after data showed a significant drop in expected revenue from its marketplace health insurance plans.

Shares of peers including Elevance Health and UnitedHealth dipped 3.7% and 1.1%, respectively.

U.S. banking giants including JPMorgan Chase, Bank of America and Wells Fargo edged higher after announcing plans to raise their third-quarter dividends after clearing the Fed's annual health check last week.

Verint Systems soared 10.8% after Bloomberg News reported buyout firm Thoma Bravo was in talks to buy the call-center software maker.

Source: Reuters

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

Risk Warnings and Disclaimers

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Warren Takunda

Stocks

Wall Street futures were in the green ahead of the bell on Wednesday, ahead of a key jobs report and a final House vote on Donald Trump's "One Big Beautiful Bill".

As of 1230 BST, Dow Jones futures were up 0.16%, while S&P 500 and Nasdaq-100 futures had the indices opening 0.12% and 0.04% firmer, respectively.

The Dow closed 400.17 points higher in what was a mixed session on Tuesday after Federal Reserve chairman Jerome Powell said the central bank would have already lowered interest rates were it not for uncertainty created by Donald Trump's so-called "Liberation Day" tariffs.

Trump's tax-and-spending megabill was given the green light by the US Senate on Tuesday, with a final vote of 51-50 after vice president JD Vance cast a tie-breaking vote due to Republican senators Thom Tillis, Susan Collins, and Rand Paul joining Democrats in voting against it. The measure will now return to the House for a vote, but it still faces a somewhat uncertain future due to several Republican holdouts over objections to recent amendments.

Billionaire Tesla CEO and ex-Department of Government Efficiency head Elon Musk also voiced his disapproval of the bill, stating that those who campaigned on cutting spending but then backed the bill "should hang their heads in shame". He also said that they "will lose their primary next year if it is the last thing I do on this Earth".

Wednesday's primary focus will be ADP's June private payrolls report at 1315 BST, with economists expecting to see private employers add 120,000 jobs last month, up sharply from the 37,000 in May.

Elsewhere on the macro front, US mortgage applications rose 2.7% in the week ended 27 June, according to the Mortgage Bankers Association, extending the previous week's 1.1% increase. Applications to purchase a home were broadly unchanged, while applications to refinance a mortgage surged by 7%.

On another note, US-based employers announced 93,816 job cuts in May, according to Challenger, Gray and Christmas, the lowest reading in four months. The services sector cut the 22,492 jobs in May, the highest monthly total for the industry since May 2020. DOGE remained the leading reason for job cut announcements in 2025, cited in 284,044 planned layoffs so far this year, including direct reductions to the Federal workforce and contractors.

"Tariffs, funding cuts, consumer spending, and overall economic pessimism are putting intense pressure on companies' workforces. Companies are spending less, slowing hiring, and sending layoff notices," said Andrew Challenger.

Source: Sharecast

Risk Warnings and Disclaimers

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Adam

Stocks

Here are five key things investors need to know to start the trading day:

Tech trade

Stocks kicked off the second half of the year on a mixed note Tuesday: The Dow Jones Industrial Average climbed 400 points, or 0.91%, but the S&P 500 dropped 0.11% and the Nasdaq Composite lost 0.82%. Tech giants like Nvidia and Microsoft ended the session lower as investors rotated out of technology stocks, instead snapping up health-care names like Amgen, UnitedHealth and Merck . On Wednesday — the second-to-last day of the shortened week — investors will get the latest ADP private payrolls report, due in before the bell. Follow live market updates.

House rules

After more than 24 hours of continuous voting, the Senate managed to narrowly pass President Donald Trump’s spending package on Tuesday. Three Republicans — Thom Tillis of North Carolina, Rand Paul of Kentucky and Susan Collins of Maine — joined Democrats and voted against the bill, requiring Vice President JD Vance to cast the tie-breaking vote. But it’s still not smooth sailing for the bill, which now will head back to the House of Representatives for lawmakers to approve the Senate’s changes. Several Republicans in the House have already voiced their opposition to the upper chamber’s version of the bill, which includes a $5 trillion increase in the debt ceiling. For a walkthrough of what the Senate’s spending package would mean for your money, click here.

Subsidies and deliveries

Shares of Tesla dropped more than 5% Tuesday amid an ongoing spat between the EV maker’s CEO, Elon Musk, and Trump, who in recent days have traded jabs on social media over the Republican spending bill. The president on Tuesday responded to Musk’s criticism of the legislation — which would soon end tax credits for EVs — by threatening to have DOGE “take a good, hard look” into the subsidies received by Musk’s companies. “He’s upset that he’s losing his EV mandate ... but he can lose a lot more than that, I can tell you. Elon can lose a lot more than that,” Trump told reporters on Tuesday. The drop in shares of Tesla, which are down about 7% so far this week, also comes ahead of the company’s second-quarter deliveries report, due Wednesday morning.

If not for tariffs

Federal Reserve Chair Jerome Powell said Tuesday that the central bank would have cut rates by now if it wasn’t for Trump’s broad tariffs. Speaking at the European Central Bank forum in Portugal, Powell said that the Fed “went on hold when we saw the size of the tariffs and essentially all inflation forecasts for the United States went up materially as a consequence of the tariffs.” The central bank has held its key borrowing rate steady in a range between 4.25% and 4.5% since December. Powell, meanwhile, has been the target of non-stop attacks from Trump, who has called the Fed chair “stupid” and demanded rate cuts. Asked on Tuesday if he would continue as Fed governor following the end of his term as chair next year, Powell said, “I have nothing for you on that today.”

‘Take big swings’

Design software company Figma became the latest tech company to file for an IPO on Tuesday, more than two months after saying it confidentially filed paperwork with the SEC. The company, which plans to trade under the ticker “FIG” on the New York Stock Exchange, was valued at $12.5 billion in a tender offer last year. In a letter, the startup’s CEO, Dylan Field, told investors that they should expect Figma to “take big swings” as a public company, including through acquisitions. Figma was set to be acquired by Adobe in a $20 billion deal announced in 2020, but the companies scrapped the agreement in 2023 due to regulatory concerns in the UK. Figma received $1 billion from Adobe in breakup fees.