‍Macrosynthesis

‍

TLDR: Markets Climb Despite Trump-Musk Chaos, Tesla Rebounds After Brutal Sell-Off

‍

The S&P 500 reclaimed the 6,000 level, capping a strong week for equities even as one of the ugliest tech sell-offs in years rattled sentiment midweek. A surreal and explosive feud between Trump and Musk triggered an 18% plunge in Tesla, wiping out $34B from Musk’s net worth, and briefly threatened SpaceX and Neuralink’s government contracts. But by Friday, calmer jobs data and renewed China trade optimism helped markets bounce back. Nasdaq surged +2.2% on AI strength, small caps led with +3.1%, and energy soared as crude jumped 6.2%. Meanwhile, Circle’s IPO echoed peak-2021 mania, AI names reignited, and investors were left debating whether to chase the rally—or brace for another reset.

‍

Euphoria Meets Exhaustion as Markets Digest May’s Surge

‍

After a record-breaking May, markets hit pause—caught between strong momentum and growing concerns. The S&P 500 hovers near 6,000 as fading recession fears give way to fresh risks: a weakening dollar, rising long-term interest rates, and growing federal deficits. Hedge fund risk-taking hit extreme levels last week, but trading activity dropped sharply. Strategies based on company research are still trailing behind rule-based strategies like we use at LevelFields that trade using data patterns, while individual investors continue to buy steadily.
‍

Morgan Stanley advised investors to turn to hedge funds and active investment strategies to mitigate risks tied to macroeconomic challenges. In a recent report titled “Global Bond Yields Rising 2025: How to Invest,” published on June 5, 2025, the firm highlights the potential for higher global rates to pressure asset prices, urging investors and active wealth managers to adopt flexible and diversified approaches to safeguard portfolios.
‍

In response to the shifting landscape, investors are favoring large, financially strong companies and avoiding weaker, interest-rate-sensitive ones. Meanwhile, demand for U.S. government bonds from overseas is slipping, and a new tax provision—Section 899—could discourage foreign investment even further. For now, markets are still grinding higher, but the foundation feels less stable with each passing headline.

‍

Dollar in Decline: FX Pressure Tests Trump’s Economic Blueprint

‍

The dollar’s slide—down nearly 9% year-to-date—is a shift in investor confidence. Foreign demand for long-dated U.S. Treasuries is drying up, and rising deficits have investors questioning the long-held notion of the dollar as a safe haven.
‍

Currencies are priced relative to one another based on supply and demand, influenced by interest rates, trade balances, and market sentiment. When the dollar weakens, it takes more dollars to buy foreign goods—raising import prices and contributing to inflation. But for U.S. exporters, it’s a tailwind: American-made goods become cheaper overseas, giving manufacturers a competitive edge. This is precisely the dynamic Trump’s onshoring push depends on.
‍

His “Buy American” agenda hinges on a dollar that’s weak enough to make U.S. production attractive globally but not so weak that it spooks capital markets or ignites runaway inflation. A strong dollar—like we saw during previous tightening cycles—undermines this strategy by making foreign imports cheaper and domestic production less competitive. It also incentivizes capital outflows as foreign investors chase higher returns abroad.
‍

Equity markets, too, are highly sensitive to dollar moves. Multinationals benefit from a weaker greenback as foreign sales translate into more dollars. But for companies reliant on imported inputs or exposed to rate volatility, a falling dollar and rising inflation can eat into margins. With Section 899 looming and tariff escalation back on the table, FX markets have become a frontline policy battleground—not just a consequence, but a constraint.
‍

In short, the dollar’s direction will determine whether Trump’s economic architecture holds—or cracks under the weight of its own contradictions.
‍

Now, all eyes turn to the “Big Beautiful Bill”—a sweeping mix of tax cuts, tariffs, and retaliatory measures. Its impact on the dollar could be decisive, either reinforcing the onshoring agenda or triggering renewed inflation and capital flight.

‍

‍

Russia Pummeled by Ukrainian Drone Attacks. Warfare Has Changed.

‍

In recent surprise drone attacks on Russia, Ukraine demonstrated significant military innovation, with two notable operations showcasing the power of low-cost drones. The first, dubbed "Operation Spider's Web," involved 117 drones striking Russian airfields deep inside the country, damaging or destroying over 40 aircraft, including strategic bombers like Tu-95 and Tu-22M3, with estimated damages ranging from $1 billion to $7 billion. The second attack targeted critical infrastructure, such as the Progress plant and a key fiber optic producer, with reports of substantial damage to military-industrial facilities, further disrupting Russian capabilities.
‍

These strikes, planned 18 months ago, were executed using drones costing as little as $400 each. We are now clearly at a turning point in asymmetric warfare, marking a "coming out moment" for the drone industry by proving the effectiveness of affordable, precision technology in altering the balance of power and forcing a reevaluation of air defense strategies globally.

‍

We put together a new free report on the Drone industry for those interested.

‍

Will the “Big Beautiful Bill” Break the Dollar—or the GOP?

‍

Trump’s “Big Beautiful Bill” is supposed to be the crown jewel of his second-term agenda. But behind the patriotic branding lies a storm brewing over the debt, the dollar, and the soul of the Republican Party. The bill lifts the debt ceiling by $5 trillion, and depending on who you ask, it either adds $2.4 trillion to the deficit (per the CBO) or cuts $1.4 trillion (per Trump’s team). That’s a $3.8 trillion swing rooted in how the numbers are scored: CBO tallies what’s legally guaranteed, while the White House counts on future growth and spending cuts that haven’t actually passed.
‍

Markets aren’t buying the optimism. Moody’s just downgraded the U.S. credit outlook, warning that rising deficits and political gridlock threaten long-term debt sustainability. And if Washington keeps spending like it has been, the U.S. may end up with a BBB credit rating—just not the kind Trump had in mind.
‍

This matters for the dollar. A deteriorating credit profile erodes confidence in Treasuries, pushing yields higher and weakening the greenback over time. The BBB’s structure—front-loading tax cuts while back-loading vague cost savings—exacerbates the risk. Without real, enforceable spending reform, the bill accelerates fiscal imbalance just as global investors are questioning America’s ability to manage its books.
‍

Meanwhile, the political clash between Trump and Musk has become a defining fracture in the GOP. Musk, once the figurehead of the Department of Government Efficiency (DOGE), now denounces the BBB as a betrayal of the anti-waste MAGA agenda. He’s floated launching a third party, threatened to back primary challengers, and even suggested Trump is protecting secrets related to Epstein—before deleting the post. Trump responded by threatening to pull federal contracts from SpaceX and calling Musk “disrespectful” and “done.”
‍

The fallout is real. Senate fiscal hawks like Rand Paul and Ron Johnson are lining up behind Musk’s critique, while swing-district Republicans are scrambling to defend a bill they just voted for. With only three GOP defections needed to sink the bill in the Senate, the path forward is murky—and the midterm risk is rising.
‍

What was meant to be a “Big Beautiful” legacy is fast becoming a Big Bipartisan Backlash. And if Congress doesn’t rein in the spending, they might not just downgrade the dollar—they might downgrade their own chances in 2026.

‍

‍

Musk Eyes a Middle Path as GOP Fractures

‍

The Trump–Musk feud has exposed a deepening rift within the Republican Party—and Elon Musk isn’t just walking away quietly. He’s floated the idea of creating a new political party: The America Party, aimed at representing what he calls “the 80% in the middle.” While it may sound far-fetched, third-party movements have surged during moments of political disillusionment, especially when one side fractures around a dominant figure—as is happening now with Trump and fiscal conservatives.
‍

Musk’s party pitch taps into real sentiment. His poll on X drew millions of responses, with overwhelming support for an alternative to both establishment Democrats and Republicans. And with the GOP sharply split between MAGA loyalists, libertarian deficit hawks, and suburban moderates wary of Trump’s hardline style, a center-populist alternative—funded by the world’s richest man—isn’t out of the question.
‍

Historically, third-party bids fizzle, but Musk isn’t Ralph Nader—he has the platform, cash, and cultural pull to at least scramble the 2026 and 2028 electoral maps. Whether he’s serious or just posturing, the signal is clear: the GOP isn’t just feuding. It’s fracturing—and Musk’s threat to pull the center with him might be the most disruptive political gambit since the Tea Party.

‍

‍

Strong Headline Jobs, Weak Undercurrents — Trump Wants Cuts

‍

May’s job report delivered a seemingly healthy 139,000 payroll gain and steady 4.2% unemployment, but the details suggest a cooling labor market. Revisions lowered prior months’ gains by 95,000, and the labor force shrank by over 600,000 people—pushing the employment-population ratio to its lowest level in over three years. Most new jobs came from healthcare and government-adjacent sectors, while cyclical industries lagged. Average hourly earnings rose 0.4%, pointing to continued wage pressure and potential inflation persistence.
‍

Still, President Trump hailed the numbers as proof of a “booming” economy—while simultaneously calling on the Federal Reserve to slash interest rates by a full percentage point. The contradiction is stark: a hot economy doesn’t typically warrant aggressive rate cuts. Trump’s push reflects political pressure, not economic consensus. The Fed, facing stubborn wage growth and uncertainty from immigration and trade policy, remains cautious. With core inflation still sticky and the job market showing only modest cracks, officials see little justification to ease.
‍

Markets agree—a June rate cut is off the table, and expectations for cuts later in the year have pulled back. Unless the labor market deteriorates further, the Fed is likely to keep rates on hold.

‍

Last Week's Market Performance

‍

Markets kicked off June with strength, as easing trade tensions and upbeat labor data lifted sentiment. The S&P 500 climbed +1.5% to reclaim the 6,000 level for the first time since February. The Nasdaq surged +2.2%, the Dow rose +1.2%, and the Russell 2000 outperformed at +3.1%. Volatility dropped -9.7% to 16.77.
‍

Leading sectors included Telecom (+3.2%), Tech (+3.0%), and Energy (+2.2%). Consumer Staples (-1.6%) and Utilities (-1.1%) underperformed. Circle (CRCL) made headlines with a blockbuster IPO, more than doubling on its NYSE debut.
‍

Top S&P 500 gainers: ON Semiconductor (+19%), Dollar General (+17%), Micron (+15%)Biggest losers: Lululemon (-16%), Brown-Forman (-16%), Tesla (-15%)
‍

Oil jumped +6.2% to $64.58, Natural Gas surged +9.8%, and Gold ticked up +0.9% to $3,346/oz. The 10-year Treasury yield edged down to 4.505%.

‍

Upcoming Events This Week

‍

It’s a relatively light week for economic data, but markets remain alert amid escalating U.S.-China tariff tensions and the deepening public feud between President Trump and Elon Musk. Key U.S. releases include CPI and PPI inflation reports, expected to show subdued price growth, and the University of Michigan’s consumer sentiment survey.
‍

With Fed officials in a pre-meeting blackout and CPI likely to reinforce a patient stance, global inflation signals and geopolitical risks are expected to drive sentiment.

‍

‍

‍

Company News

‍

LevelFields AI Stock Alerts Last Week

‍

Cellectar (CLRB) Skyrockets +66% on Breakthrough Therapy Designation

‍

Cellectar Biosciences soared 66% in a single day after the FDA granted Breakthrough Therapy Designation for its lead candidate Iopofosine I-131 in treating Waldenstrom Macroglobulinemia (WM). The news positions Cellectar at the forefront of targeted radiopharmaceuticals and significantly boosts the commercial potential of its pipeline in rare hematologic cancers.

‍

Applied Digital (APLD) Explodes +50% on $7B CoreWeave Deal

‍

Applied Digital surged nearly 50% after announcing a 15-year, $7 billion hosting contract with AI infrastructure powerhouse CoreWeave. The agreement marks one of the largest long-term infrastructure deals in the AI space, validating APLD’s data center strategy and cementing its role in the AI buildout arms race. We flagged the stock back in March as a Level 2 trade, noting it was likely to keep rising after the 9% gain in two weeks we captured.

‍

Circle (CRCL) Goes Parabolic in IPO Debut — 2021 Vibes Return

‍

Circle Internet (CRCL) exploded onto public markets this week, surging 168% on Day 1 with most gains at the opening bid, after pricing at $31 and closing at $83.23. The stablecoin giant—issuer of the $60B USDC—traded as high as $123.49 in intraday action, marking a near 300% rally at the peak, triggering multiple volatility halts on the NYSE. The listing was upsized twice and priced above the already elevated range—clear evidence that valuation discipline was left at the door.
‍

Circle’s IPO evokes full-blown 2021-style FOMO, joining names like CoreWeave and eToro in reigniting a risk-on mood in capital markets. With $578.6M in Q1 revenue (up 58.5% YoY) and $122M in adjusted EBITDA, Circle isn’t just riding hype—its reserve income from USDC-backed assets has become a core yield engine, especially as crypto adoption accelerates post-Trump’s return. It's trading at 10X revenues right now.
‍

Market cap finished north of $16B, and bulls see this as a bellwether for fintech, crypto, and the broader IPO pipeline. NYSE President Lynn Martin called it “the first true spark” of an IPO resurgence. Still, questions loom over long-term sustainability—and whether the current euphoric pricing can hold once the dust settles.

‍

Lululemon (LULU) Plunges 21% on Weak Outlook, Tariff Pressures Mount

‍

‍

Lululemon shares cratered 21%—their worst drop since 2020—after the athletic wear giant slashed full-year guidance and forecast Q2 revenue and EPS below Wall Street expectations. Despite topping Q1 earnings estimates ($2.60 vs. $2.58), comparable sales in the Americas fell 2%, signaling trouble in its core U.S. market.
‍

The culprit? A toxic mix of consumer caution, fashion fatigue, and Trump-era tariffs. Lululemon now assumes 30% tariffs on China and 10% on other sourcing hubs like Vietnam, Indonesia, and Sri Lanka—impacting nearly its entire supply chain. CFO Meghan Frank confirmed the company will implement targeted price hikes, but warned they’ll be “modest,” as shoppers grow increasingly selective.
‍

Gross margin beat at 58.3%, but full-year margin is expected to fall 110 bps—nearly double the prior forecast—due largely to rising import costs. CEO Calvin McDonald admitted U.S. performance “did not meet expectations” and called the environment “dynamic,” hinting at uncertainty around demand and trade policy.
‍

With LULU down over 30% YTD, analysts fear the brand is losing momentum just as rivals ramp up promotions and looser-fit styles gain traction.

‍

Brown-Forman Falls 18% as Tariffs, Sobriety Trends Weigh on Booze

‍

Brown-Forman (BF.B), the maker of Jack Daniel’s, plunged 18% after a disappointing Q4 earnings miss and a downbeat outlook for FY2026. Sales fell -7% YoY to $894M, with tequila and ready-to-drink categories slumping -14% and -6%, respectively. The company blamed consumer pullbacks, tariff uncertainty, and macro volatility, warning that both revenue and income could decline again this year.

‍

Other Company News, in Brief

‍

• Meta is buying nuclear power from Constellation Energy to power its artificial intelligence efforts, which includes a fully autonomous ad system in 2026
• Morgan Stanley is thinking of adding crypto trading to eTrade
• Palantir's stock trading volume now exceeds Amazon
• Amazon is testing out humanoid robots for deliveries
• Elon Musk’s SpaceX launched nearly 400 Starlink satellites in May
• e.l.f. Beauty, Michael Burry's only bullish investment, announced that it had agreed to buy rhode, a fast-growing skin care brand for $1 billion.
• FuelCell Energy laid off 22% of its staff

‍

‍

Chronic Illness Exploding in Kids - Here's why

‍

Top Defense Stocks to Watch in 2025

‍

Trump Unveils Missile Defense Plan

‍

‍

‍

‍

This is not financial advice. All information represent opinions only for informational purposes. Given the vast number of stocks we cover in these reports, assume staff covering stocks have positions in stocks discussed.

‍

Have feedback or a request for specific data? Drop us a note at support@levelfields.ai