Tough week ~ ⛾:K

Investor confidence in the US has taken another knock this week on concern President Donald Trump's tax bill will worsen the already swelling deficit — a worry underscored by Moody's Ratings' decision last week to strip the world's largest economy of its top credit rating.

US stocks are set for their worst weekly decline since Trump's global tariff broadside triggered a selloff at the beginning of April, while yields on 10-year Treasuries have pushed higher this week to top 4.5%. A gauge of the dollar's strength has slumped to the lowest level since 2023. Havens have risen, with gold rallying almost 4% and Bitcoin climbing 7%.

Rising bond yields are a particular concern. As Trump was putting pressure on House members to back the tax bill, the Treasury on Wednesday found tepid demand at an auction of 20-year bonds. The moves were reminiscent of Trump's wrangle with the bond markets last month, when he blinked.

Higher yields not only threaten to dampen economic growth — as they translate into higher borrowing costs for everything from homes to cars — but to accelerate the government's fiscal deterioration. As rates rise, so does the Treasury's interest bill. Investors will need to wait and see how Trump's "one big, beautiful bill," which passed the House, makes it through the Senate. —Richard Frost

What You Need to Know Today

The fallout from the Trump administration's blocking Harvard University from enrolling international students is growing, with thousands of students thrown into limbo. Both the suddenness and timing of the move — after acceptance letters for the fall term have been sent out and transfer applications to other schools are closed — left current and future attendees struggling to figure out what to do next. "I've been crying a lot," said Marie Chantel Montas, a third-year Ph.D. candidate at Harvard University from the Dominican Republic. "My program is extremely specific. I don't know if I can find another university that would take me."

The shock move also threatens a cradle for global political leaders. Harvard has produced eight US leaders, most recently former President Barack Obama, the most among universities. Outside the US, Harvard has educated countless international students who went on to become political elites. Former US Treasury Secretary Lawrence Summers called on Harvard to fight back. "Harvard must start by resisting," Summers, who is president emeritus of Harvard University, told Bloomberg TV. "This is the stuff of tyranny."

We are now halfway through Trump's 90-day freeze on his so-called reciprocal tariffs, and the mood among businesses, consumers and governments facing them is that of severe uncertainty. The next 45 days may not provide much relief from the fog. Trump himself has indicated that talks won't lead to agreements for every nation before the July deadline, saying that 150 countries "want to make a deal" but that many will be assigned their tariff level. Treasury Secretary Scott Bessent said "if they're not negotiating in good faith, they are going to get a letter saying 'here is the rate.'"

Scott Bessent, US treasury secretary. Photographer: Pete Kiehart/Bloomberg

Japan's biggest life insurer Nippon Life Insurance said unrealized losses on its domestic bond holdings more than tripled to ¥3.6 trillion ($25 billion) last fiscal year as rising interest rates undercut the value of its portfolio. Life insurers across Asia are facing billions of dollars in paper losses from market turmoil triggered by reactions to Trump's policies. Nippon Life is replacing low-yielding bond holdings with higher-yielding ones and doesn't expect the paper losses to lead to a crisis, but is cautious about the uncertain long-term rate outlook in Japan.

Jane Street generated more than $2.3 billion in net revenue from equity derivatives last year in India, where its lucrative trading strategies have sparked a probe by regulators. The trading haul was a sharp surge from 2023, underscoring the country's growing importance to the firm's global expansion, according to people familiar with the matter. India accounted for more than a 10th of the New York-based giant's record $20.5 billion in net trading revenue last year, the people said, asking not to be identified as the information is private.

Car dealership groups in two Chinese provinces have gone out of business since last month, both of them BYD retailers, in evidence of the tough competition in the nation's auto market. Dealerships are facing a profound shift brought about by the transition to electric vehicles and a slowdown in consumer spending that's left yards stuffed with stock. Stock levels in April reached 3.5 million cars, or 57 inventory days, the highest since December 2023.

Vietnam authorities have instructed local telecoms and internet service providers to block the Telegram messaging app for allegedly failing to prevent illegal content and anti-government activities being carried out by its users. The majority of Telegram groups in Vietnam contain what the regulator called "toxic" information, including groups accused of spreading anti-government content and crimes such as fraud, selling user data and drug trafficking, according to a statement on the government's website.

Vietnam is taking steps to block Telegram. Photographer: Maika Elan/Bloomberg

A Los Angeles investment firm is in discussions to buy out OnlyFans in a deal that values the site at $8 billion, Reuters reported. OnlyFans, which soared in popularity during global Covid lockdowns, has been in talks since at least March with Forest Road Company about a transaction with unknown terms, Reuters said, citing anonymous sources. The company may be engaging with other suitors as well, the news service reported. London-based OnlyFans is known for hosting pornographic and adult content forbidden on most other social networks.

What You'll Need to Know Tomorrow

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Markets

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Banking

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Bonds

India-US Yield Gap at 20-Year Low Spurs Concern of Outflows

Trade

China Asks Dutch to Ease Chips Export Curbs, Minister Says

Bloomberg Opinon

A 'Golden Dome' Could Make America Less Safe

For Your Commute

The growl of extractors echoes across the vast mountaintop mines of Yichun in central China. A procession of heavy-duty trucks rolls down the valley to waiting refineries, where shipments of gray ore are processed into a battery material vital to the world's energy transition — lithium. The surging popularity of electric vehicles has transformed this once threadbare area into the country's lithium mining capital. But the incessant grind feeding the world's leading battery industry masks the reality that very few of those operating here are making a profit.

Read our deep dive into the industry here.