US Stock Futures Slip After Moody’s Downgrade, Trump’s Walmart Warning

Summary:

Investing.com-- U.S. stock index futures fell on Sunday evening after Moody’s downgraded its investment grade rating on the U.S.,...

U.S. stock index futures fell on Sunday evening after Moody’s downgraded its investment grade rating on the U.S., ramping up concerns over slowing economic growth and heightened debt levels.

Comments from President Donald Trump’s administration that some U.S. companies, specifically Walmart, will have to absorb his trade tariffs, also kept investors fretting over the impact of the levies on corporate earnings.

Futures fell after Wall Street clocked a positive session on Friday, as a deescalation in the U.S.-China trade war sparked an extended rally in risk-driven stocks. But this rally was seen slowly petering out by Friday.

S&P 500 Futures fell 0.6% to 5,942.25 points, while Nasdaq 100 Futures fell 0.5% to 21,393.50 points by 19:52 ET (23:52 GMT). Dow Jones Futures fell 0.6% to 42,489.0 points.

Moody’s downgrades US rating, cites debt concerns

Moody’s downgraded the U.S. sovereign credit rating on Friday to Aa1 from Aaa, bringing the rating one notch lower from its highest rating.

The ratings agency cited concerns over the country’s growing $36 trillion debt pile, which could be exacerbated by Trump’s plans to cut taxes.

Moody’s cut was widely criticized by Trump’s administration, which touted several measures to bring down government spending and debt levels. But the measures, especially the Elon Musk-led Department of Government Efficiency- have so far made limited progress.

Trump’s trade tariffs, which he claims are aimed at increasing federal revenue and reducing the deficit- also sparked concerns over the U.S. economy, with turmoil in the bond market spurring Trump into postponing his plans for reciprocal trade tariffs.

Trump says Walmart should ‘eat the tariffs’

Trump over the weekend said that Walmart Inc (NYSE:WMT) should absorb price increases stemming from higher import tariffs, and warned the retail giant against any price increases.

His warning came after Walmart last week said it will not be able to absorb all of the tariff costs, and will need to increase prices on general merchandise coming in from China. Walmart said that even the lower tariffs agreed to by the U.S. and China last week stood to increase prices.

Walmart’s comments highlighted the growing headwinds faced by U.S. companies dependent on imports, as Trump sticks to his tariff agenda.

Walmart is the world’s biggest retailer and is largely seen as a bellwether for U.S. consumer strength.

Trump’s comments also pushed up concerns over the impact of his trade tariffs on other U.S. businesses, and to what extent they planned to pass on costs to consumers.

Still, a deescalation in the U.S.-China trade conflict helped Wall Street clock some gains last week. The S&P 500 rose 0.7% to 5,958.38 points on Friday, while the NASDAQ Composite rose 0.5% to 19,211.0 points. The Dow Jones Industrial Average rose 0.8% to 42.654.74 points.

Source: Investing

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Political

Former U.S. President Joe Biden has been diagnosed with an "aggressive form" of prostate cancer that has metastasized to the bone, his office said in a statement on Sunday.

Biden, 82, was diagnosed on Friday after having experienced urinary symptoms, and he and his family are reviewing treatment options with doctors, the statement said.

"While this represents a more aggressive form of the disease, the cancer appears to be hormone-sensitive which allows for effective management," his office said.

Biden, who served as president from 2021 to 2025, abruptly ended his bid for reelection last July, weeks after a halting performance during a debate against Republican candidate Donald Trump prompted panic among his fellow Democrats. Vice President Kamala Harris took over as the party's nominee but lost in November to Trump.

Biden's physical health and mental acuity drew intense media scrutiny even before the debate. At the time of his election, Biden was the oldest person to win the presidency.

Trump, 78, broke that record when he defeated Harris last year.

Reporting by Nandita Bose, Costas Pitas and Joseph Ax; Editing by Paul Simao, Colleen Jenkins and Rod Nickel

Source: Reuters

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Economic

The Decline of Cash: South Korea’s Payment Habits in Transformation

Ten years ago, South Koreans paid in cash roughly four out of every ten times. By 2024, that number has plummeted to just once or twice out of ten, according to the Bank of Korea’s (BoK) latest national survey on financial behavior. The results, gathered from 3,500 respondents aged 19 and older, confirm that credit cards dominate the payment landscape, accounting for 46.2% of transactions, followed by debit cards at 16.4%, while cash lags at only 15.9%.

The long-term decline is stark. From 41.3% in 2013, cash payments slid steadily: 36% in 2015, 26.4% in 2019, and 21.6% in 2021. Despite this fall, the average Korean still carries around 66,000 won (about $47), with older adults in their 50s and 60s holding more cash than younger groups, particularly those in their 20s, who average just 27,000 won.

Demographics and Digital Adoption

Age continues to shape payment preferences. Debit card use is strongest among those in their 20s, while credit card use peaks among people in their 30s to 50s. Citizens aged 60 and above tend to rely more on cash, largely due to lower digital literacy and limited access to credit after retirement.

BoK's report also shows that despite South Korea having income levels and ATM infrastructure comparable to countries with high cash usage, its actual reliance on cash is far lower—just 10% by value of transactions in 2023, placing it 29th out of 40 major economies surveyed by Worldpay. Countries like Japan (41%), Spain (38%), and Germany (36%) remain more cash-oriented, while Nordic and Commonwealth nations such as Sweden, Norway, and Canada report cash usage under 7%.

The bank attributes South Korea’s rapid decline in cash to several factors: strong credit card infrastructure, policies encouraging card use, and laws requiring merchants to accept cards. The number of ATMs has dropped from nearly 88,000 in 2020 to just over 80,000 in 2023.

From E-Wallets to Stablecoins

South Korea’s transition toward a cashless society is further reinforced by digital developments. Increasing numbers of unmanned stores, kiosk-only payment systems, and cities like Seoul piloting cashless buses are redefining the urban payment experience. As traditional cash use shrinks, fintech innovations are stepping in.

Stablecoins—cryptocurrencies pegged to fiat currencies—are gaining attention. Although the issuance of won-based stablecoins is currently prohibited domestically, U.S. dollar-based stablecoins like USDT are already used for overseas remittances and crypto trading. The global stablecoin market nearly doubled to $237.3 billion by March 2025, indicating a growing appetite for digital payment assets.

Fintech firms such as Hong Kong-based RedotPay have introduced Visa-compatible cards that allow payments using USD-denominated stablecoins, and are actively courting Korean users.

Meanwhile, the BoK is building its digital infrastructure. It has begun institutional testing of a central bank digital currency (CBDC) and is exploring deposit token experiments—steps that suggest the long-term vision includes blending physical and digital currency systems.

But Cash Isn’t Dead Yet

Despite digital advances, the BoK is firm in its stance: physical money isn’t going away. Deputy Governor Lee Jong-ryeol recently emphasized that cash remains crucial, especially in emergencies or among those not fluent in digital technologies. Power outages or system failures could render digital payments unusable, but cash still functions.

Lee stressed that public trust in digital payments is grounded in the assurance that digital balances can always be redeemed for real, central bank-issued cash. Maintaining this trust is central to the stability of the monetary system.

In short, while cash may be in retreat in South Korea, it remains a necessary foundation beneath the digital economy’s rapid ascent.

Source: The Korean Times

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Economic

Banxico Lowers Interest Rates as Growth Slows and Trade Risks Loom

In a widely expected move, the Central Bank of Mexico (Banxico) reduced its benchmark interest rate by 50 basis points to 8.50%, the lowest since August 2022. The decision, unanimously approved by its governing board, reflects increasing concerns over Mexico’s stagnating growth and external economic volatility, particularly due to escalating trade tensions with the United States.

Inflation in Mexico ticked up slightly to 3.93% in April year-over-year but remains comfortably within Banxico’s target range of 3% ± 1 percentage point. However, the bank warned that uncertainty linked to shifting U.S. trade policy—especially under the Trump administration’s renewed tariff strategy—has clouded the outlook for both inflation and economic activity.

Official GDP growth for Q1 2025 was just 0.2%, barely escaping a technical recession. Analysts surveyed by Reuters foresee full-year growth hovering near zero, as consumption and investment wane under trade-related headwinds.

Diverging Views on Monetary Path

While Banxico hinted at possible further rate cuts, its language suggested caution. In particular, the bank’s statement referenced "persistent economic weakness" three separate times—a sign that it is weighing the risks of moving too quickly on monetary easing.

Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, noted this careful tone, warning that Banxico is increasingly wary of easing policy too aggressively in a volatile environment.

In contrast, Alberto Ramos of Goldman Sachs interpreted the central bank’s stance as relatively upbeat, pointing to a likely continuation of rate reductions, possibly another 50 basis points as early as the next meeting.

Outlook: Fragile Recovery Amid Global Volatility

Banxico’s next steps will hinge on the evolving trade relationship with the U.S., inflation trends, and whether growth regains momentum in the second half of the year. With the Trump administration’s tariff agenda casting a long shadow, Mexico’s central bank faces a delicate balancing act—stimulating a weak domestic economy without fanning inflationary pressures or currency instability.

For now, Banxico appears committed to a gradual easing cycle but remains alert to any external shocks that could derail its cautious recovery path.

Source: Bloomberg

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Commodity

Economic

Japanese Oil Sector Reverses Course on Green Transition Amid Rising Risks

Japan’s leading oil refiners are undergoing a strategic pivot, retreating from their earlier climate-focused ambitions in favor of fossil fuel investments. Companies such as Eneos Holdings and Idemitsu Kosan have started scaling down hydrogen and ammonia development plans, citing economic and geopolitical pressures that challenge the viability of their low-carbon strategies.

Eneos CEO Tomohide Miyata recently stated that momentum toward a carbon-neutral society has "clearly slowed." The company has officially withdrawn its previous target of supplying 4 million tons of hydrogen annually by fiscal year 2040. Miyata noted that elevated material costs and inflation have diminished the profitability of green energy investments.

Carbon-neutral Delays Driven by Financial Strain and Global Instability

This reorientation reflects broader concerns over energy security, rising inflation, and policy uncertainty—particularly from the United States. As global trade and energy policies shift, Japanese energy giants are opting for a more conservative, cost-focused approach.

Idemitsu Kosan, Japan’s second-largest refiner, announced a ¥200 billion (roughly USD 1.4 billion) cut in its budget for decarbonization initiatives. Chairman Noriaki Sakai confirmed that the company's investment in hydrogen, ammonia, and synthetic fuels will now total ¥800 billion from 2023 to 2030, down from a previously planned ¥1 trillion.

Both Eneos and Idemitsu maintain their long-term 2050 net-zero goals, but leaders now emphasize the need for a “flexible approach” in timing and strategy. As Sakai explained, “We recognize the momentum toward decarbonization has slowed. So we must adopt a more pragmatic path.”

LNG Rises as a Transitional Energy Source

While investment in green hydrogen and carbon-neutral fuels is slowing, liquefied natural gas (LNG) is emerging as the preferred bridge fuel. LNG offers a lower-emission alternative to coal and oil, and Japan sees it as essential for balancing its energy mix while green technologies remain commercially immature.

Idemitsu plans to expand its LNG investments to meet near-term domestic demand and ensure steady supply. This aligns with a growing international sentiment that energy security must take precedence in the current volatile environment.

A Global Recalibration of Energy Priorities

Japan’s shift is not an isolated case. Globally, several energy majors are also tempering their climate goals. BP recently reduced its renewables investments, and Norway’s Equinor scrapped its low-carbon energy target for 2030. At the annual energy summit in Houston in March, industry leaders widely agreed that the transition narrative must evolve—from “energy transition” to “energy addition”—emphasizing security and stability over speed.

In summary, Japan’s oil giants are realigning their strategies amid cost pressures and uncertain policy environments. Fossil fuels and LNG are regaining prominence as practical, secure energy options—while the vision for a carbon-neutral future remains, it is now on a longer, more cautious timeline.

Source: Reuters

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Commodity

China–U.S. Trade War

Lynas Rare Earths Breaks China's Grip on Strategic Mineral Refining

In a major strategic breakthrough, Lynas Rare Earths—a company headquartered in Australia—announced on May 16 that it had successfully produced commercial quantities of dysprosium oxide at its processing plant in Malaysia. This development marks the first time any producer outside China has achieved this capability at commercial scale, effectively ending Beijing’s complete control over heavy rare earths refinement.

Amanda Lacaze, CEO of Lynas, emphasized that the company’s progress is more than symbolic. By producing dysprosium, a critical component for permanent magnets used in electric vehicles and military applications, Lynas is actively diversifying and de-risking a supply chain that has long been monopolized by China.

The company also expects to begin producing terbium—a similarly strategic heavy rare earth—by June. These rare earths are vital for manufacturing motors, wind turbines, precision weapon systems, and various high-performance electronics.

Australia’s Strategic Stockpile: A New Resource Powerhouse

In parallel with Lynas’ industrial success, the Australian government under Prime Minister Anthony Albanese has committed AUD 1.2 billion to establish a strategic reserve for critical minerals. This stockpile will include rare earths as well as other minerals of national and global importance, such as lithium and cobalt—resources in which Australia already leads in global production.

The reserve is a direct response to geopolitical vulnerabilities exposed by the concentration of mineral processing in China. Despite having significant raw material reserves globally, China accounts for more than 90% of the world's rare earth refining—a dominance that has raised concerns among Western governments and industry leaders, especially amid rising tensions over trade and security.

Rare Earths: Critical to the Future, Difficult to Produce

Rare earth elements (REEs), a group of 17 chemically similar metals, are often labeled as "rare" not due to scarcity but because of the technical and environmental challenges in extracting and refining them. Heavy rare earths such as dysprosium and terbium are even more difficult to separate and process compared to their light rare earth counterparts like neodymium or lanthanum.

These elements are indispensable to a wide range of high-tech applications: dysprosium increases the heat resistance of magnets in EV motors; terbium is key to advanced military radar and sonar systems; samarium is used in guidance systems and space technologies. Their availability is directly linked to the pace of clean energy transition and national defense modernization in countries like the U.S., Japan, and members of the EU.

Geopolitical and Market Implications

Lynas’ announcement reshapes the rare earths market and delivers a critical alternative for nations seeking to reduce dependence on China’s mineral supply chain. In a market where supply concentration translates into geopolitical leverage, Australia is positioning itself not only as a resource supplier but as a processing and technological hub.

This move also comes amid growing efforts by the U.S., EU, and Japan to co-finance rare earth projects outside China. With Lynas now leading by example, further investments in refining capacity across Australia, North America, and Southeast Asia may accelerate.

Meanwhile, market watchers anticipate that prices for non-Chinese heavy rare earths will rise, reflecting both the supply scarcity and the strategic value of secure sourcing.

Australia’s Ascent as a Rare Earth Refining Power

By producing heavy rare earths outside of China, Lynas has achieved a geopolitical milestone that goes beyond commodity markets. It represents a rebalancing of global industrial power—offering democratic nations an alternative path to securing materials vital for the next generation of clean energy and defense technologies.

Australia's growing role, backed by governmental foresight and private-sector capability, could fundamentally shift the structure of global supply chains in one of the most contested domains of the 21st century.

Source: AFP

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Commodity

Aid Disruption Leaves Life-Saving Food Stranded Amid Global Hunger Crisis

Nearly $100 million worth of U.S. emergency food supplies is now sitting idle and deteriorating in global warehouses, according to multiple sources including former officials from the U.S. Agency for International Development (USAID). The disruption stems from sweeping aid cuts enacted by the Trump administration in January 2025, which halted deliveries and suspended contracts, even as global hunger levels reached crisis proportions.

According to inventory records, approximately 66,000 tons of ready-to-deploy food, including fortified cereals, high-energy biscuits, and therapeutic peanut pastes such as Plumpy’Nut, remain locked in storage facilities in Djibouti, South Africa, Dubai, and Houston. These supplies were originally destined for countries like Gaza and Sudan, where millions face starvation.

The volume of stockpiled food could sustain over 3.5 million people for a month. But unless urgent measures are taken before July—when some of the products expire—much of it will be incinerated, repurposed for livestock feed, or disposed of by other means.

Policy Shift Reverses Decades of U.S. Humanitarian Leadership

The decision to scale back USAID’s global humanitarian footprint marks a sharp departure from longstanding American policy. In 2024, the U.S. contributed $61 billion to foreign aid—38% of all tracked by the UN—with more than half administered via USAID. However, under the new administration, USAID has been earmarked for closure by September 2025, with mass layoffs and frozen budgets already underway.

This shift comes amid a surge in global food insecurity. The World Food Programme (WFP) estimates 343 million people are facing acute hunger globally, including 1.9 million on the brink of famine, particularly in Gaza, Sudan, South Sudan, Haiti, and Mali. In Sudan alone, over half the population (25 million people) is currently experiencing food emergencies.

The impact of aid disruption is already being felt on the ground. The NGO Action Against Hunger reported the deaths of at least six children in the Democratic Republic of Congo in April, after it was forced to shut down treatment centers due to halted U.S. funding.

Food Supplies Degrade While Approval Stalls

Despite temporary exemptions for aid to Gaza and Sudan, logistical bottlenecks and bureaucratic delays have prevented the release of stockpiled food. Nearly 500 tons of high-energy biscuits stored in Dubai are set to expire in July. These alone could have treated over 27,000 severely malnourished children for a month.

One proposal to transfer the food to capable humanitarian agencies is still awaiting approval from the State Department’s Bureau of Foreign Assistance. In the meantime, key USAID contractors, such as Edesia—a major producer of therapeutic food—are storing over 5,000 tons of unused products worth $13 million.

Navyn Salem, founder of Edesia, warned that their stocks, meant to save over 480,000 children, may be wasted unless urgent decisions are made. “These products don’t belong in a warehouse. They belong in the hands of starving children,” she said.

Systemic Breakdown Puts Millions at Risk

The consequences of delayed distribution are severe. UNICEF warned in March that 2.4 million children across 17 countries may lose access to RUTF (Ready-to-Use Therapeutic Food) this year due to funding gaps. Jeanette Bailey from the International Rescue Committee confirmed that without continuity in nutritional programs, mortality risk spikes dramatically, with over 60% of untreated severely malnourished children expected to die quickly.

USAID’s four warehouses are integral to global crisis response. Under normal operations, these facilities enable rapid deployment to conflict zones and disaster areas. Without them, organizations lack both the resources and logistical capacity to respond to famines in places like Sudan or Haiti.

From Global Leadership to Humanitarian Paralysis

The U.S., long considered the cornerstone of international humanitarian response, now finds its aid infrastructure unraveling just as the world faces unprecedented levels of food insecurity. As tens of thousands of tons of food rot in warehouses, the gap between available resources and those in urgent need grows increasingly tragic.

Unless decisive action is taken—both to preserve and deploy existing food stocks—the cost will not only be financial, but measured in the lives of the most vulnerable. The crisis unfolding today risks becoming a historic failure of leadership, with implications that may reverberate far beyond 2025.