Key takeaways

Trump's budget proposes $160+ billion in cuts to environmental, education, and foreign aid programs while protecting entitlements
EU and China signal willingness to resolve trade disputes with the US as tech companies scramble to adapt supply chains
Big tech companies remain resilient despite tariff threats, leveraging cash reserves and durable business models

Trump Budget Cuts Target Non-Defense Spending

The White House is releasing its fiscal 2026 budget with over $160 billion in cuts to non-defense discretionary spending, representing a 22.6% reduction from 2025 projections. The plan targets environmental, renewable energy, education, and foreign aid programs while protecting Medicare, Medicaid, and Social Security. Defense, border security, veterans, and law enforcement would see increases. Separately, Trump signed an executive order cutting federal funding for public media, including PBS and NPR.

Trade War De-escalation Signals

Both the EU and China are signaling willingness to resolve trade tensions with the US. The EU's top trade negotiator proposed buying $56 billion worth of American goods, including LNG and agricultural products, to address trade imbalances. Meanwhile, China indicated openness to trade talks if Washington shows "sincerity" through concrete measures like canceling tariffs. Trump has maintained that significant Chinese concessions would be required before any tariff reductions.

Tech Companies Navigate Tariff Landscape

Apple's earnings revealed the tangible impact of tariffs, with CEO Tim Cook predicting $900 million in added costs for the June quarter. The company is urgently working to ship most US-bound iPhones from India and Vietnam by summer. Despite these challenges, big tech companies have demonstrated resilience. As Richard Kramer of Arite Research notes, these firms have substantial cash reserves ($300-400 billion), durable business models, and the ability to invest through downturns—advantages that most S&P 500 companies lack.

Economic Indicators and Market Sentiment

Today's jobs report will provide the first hard economic data since Trump's "Liberation Day" tariff announcements. Economists are watching for signs that businesses have paused hiring in response to tariff uncertainty, as well as impacts from declining immigration and federal government layoffs. Meanwhile, oil majors like Shell are posting strong earnings despite market volatility, with Shell announcing a $3.5 billion share buyback after better-than-expected first-quarter results.

China, EU Signal Desire to Cool Trade Fight

Key takeaways

Trump Budget Cuts Target Non-Defense Spending

Trade War De-escalation Signals

Tech Companies Navigate Tariff Landscape

Economic Indicators and Market Sentiment

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