Trump’s Feuds With Musk, Powell Are Not Stock Market Movers. This Is.

U.S. Secretary of State Marco Rubio (R) meets with Japanese Foreign Minister Iwaya Takeshi. (Kayla Bartkowski/Getty Images)

Forget the latest installment of Love Island USA, Donald Trump’s second term in office is starting to feel like a never-ending reality show centered on the president’s toxic relationships with Tesla CEO Elon Musk and Federal Reserve Chair Jerome Powell.

Investors shouldn’t let it distract them from the overarching plotline for markets—the fallout from trade deals.

While Trump’s attacks on Musk and Powell make for good drama, it’s unlikely either feud will mean much for stocks. Tesla shares tumbled more than 5% Tuesday, but the selloff barely made a dent in the broader market. And Powell still looks unlikely to bow to pressure to cut interest rates quickly, despite fierce attacks from the president.

Trade tensions between the U.S. and Japan are a much bigger deal for Wall Street. Trump said Tuesday that he was unlikely to reach a deal with Tokyo, and threatened tariffs of between 30% and 35%. How that plays out over the next few days could set the tone for negotiations with other big U.S. trading partners, such as Canada and the European Union.

The big date for markets is now just a week away, with the 90-day pause on reciprocal tariffs due to end July 9. Failure to land more deals before that deadline will likely stoke concerns that sweeping levies will start to have an impact on the U.S. economy.

While Trump’s messy public spats with Musk and Powell might be an entertaining watch, trade developments should be the prime-time viewing for markets.

—George Glover

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President Says No Trade Deal With Japan as Deadline Nears

President Donald Trump said he isn’t looking to extend the July 9 deadline for trade deals, and threatened to impose tariffs of up to 35% on Japan as he told reporters an agreement with the world’s fourth largest economy was unlikely. However, he said the U.S. could reach a deal with India.

• “I’ll be writing letters to a lot of countries, and I think you are just starting to understand the process,” Trump said. “We dealt with Japan, I’m not sure we’re going to make a deal. I doubt it with Japan. They’re very tough.”
• Trump added that he was going to ask Japan to pay tariffs of “30%, 35% or whatever the number is that we determine.” That would be higher than the 24% initially set for Japan when the reciprocal tariffs were unveiled on April 2.
• The Trump administration paused most of those tariffs on the expectation that trade delegations would come to Washington to negotiate deals for themselves rather than accept the administration’s tariffs, which were mostly set at ranges from 20% to 49%.
• Japan’s Prime Minister Shigeru Ishiba said Wednesday he was determined to protect the country’s national interests. “Japan is different from other countries as we are the largest investor in the United States, creating jobs,” he said in a public debate, Reuters reported.

What’s Next: With the July 9 deadline just a week away, investors can expect a flurry of developments in the coming days. Washington’s dealings with India and Japan may provide clues as to what the overall global trade landscape will look like for the rest of Trump’s term in office.

— Liz Moyer and Callum Keown

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Fed’s Powell Eyeing June Jobs Report For Next Move

Economists expect June’s jobs report to show that payroll growth slowed and the unemployment rate edged higher. A strong report could give Federal Reserve policymakers more cover to keep rates steady, while a weaker result could fuel calls for rate cuts earlier than expected.

• The number of new jobs created has averaged 135,000 a month, down from 186,000 a month under President Joe Biden. An unexpected decline in new jobs or a spike in unemployment could spur Fed policymakers to cut rates at their July 29-30 meeting.
• Fed Chair Jerome Powell warned that the Fed’s ability to cut rates is being complicated by President Donald Trump’s trade policies, citing the size of the tariffs that have caused inflation forecasts to increase materially. He said a rate decision in July would depend on the data.
• Trump has repeatedly called for Powell to lower rates, saying it would allow the U.S. to pay less in interest on its debt. Two Fed officials have indicated they could support lowering rates as soon as this month because they expect price increases from tariffs to be a one-off.
• European Central Bank President Christine Lagarde said Tuesday during the ECB’s Forum on Central Banking in Portugal that she would do “exactly the same thing as our colleague Jay Powell does.” The audience, including other central bank leaders, broke into applause.

What’s Next: Although Powell’s term as chair ends in May 2026, Trump might nominate a new Fed chair earlier than usual. Trump has said he wants “Anybody but Powell” in the role, and he told reporters traveling with him on Tuesday that he has two to three top candidates in mind.

—Nicole Goodkind and Janet H. Cho

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House Republicans Race to Push Megabill Across Finish Line

President Trump and House Republicans are racing to pass the Senate-approved version of his tax-and-spending megabill as-is, aiming to extend his 2017 tax cuts despite concerns about deep cuts to Medicaid, its higher overall cost, and its adding more than $3 trillion to the national debt.

• The Senate version passed in a 51-50 vote, with Vice President JD Vance breaking the tie after Republican Sens. Susan Collins (Maine), Rand Paul (Ky.), and Thom Tillis (N.C.) voted against it. House Republicans can afford to lose only three votes, with all Democrats expected to oppose it.
• Speaker Mike Johnson (La.) said GOP House lawmakers would work quickly to pass the bill by Friday. One GOP lawmaker abstained in May when the House passed its version of the megabill. Debate is scheduled to begin in the House this morning.
• The House Freedom Caucus criticized the Senate bill over its $651 billion in increased costs, before interest, compared with “what we agreed to.” House GOP moderates have threatened to vote against the latest megabill for making deep cuts to Medicaid.
• The nonpartisan Congressional Budget Office expects the bill to add about $3.3 trillion in the national debt over the coming decade. But Senate lawmakers maneuvered to pass the bill with a simple majority vote by treating the extension of 2017 tax cuts as costing nothing.

What’s Next: Friday’s July 4 deadline is artificial. The GOP is also using the bill to increase the debt ceiling. Treasury Secretary Scott Bessent has said that the U.S. will be at risk of defaulting in August if the ceiling isn’t raised, making the true deadline for passing a bill later in July.

— Brian Swint, Joe Light, and Janet H. Cho

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Senate Clears Way for States to Regulate Artificial Intelligence

The Senate broadly rejected a provision in the megabill that would have limited states’ ability to regulate artificial intelligence, delivering a crushing blow to tech giants like Meta Platforms and Microsoft. Lawmakers voted nearly unanimously to remove the provision from the bill despite heavy industry support for it.

• It could have blocked states from enforcing limits on AI technology for at least five years—and would have blocked federal funding from those that did, with some exceptions. Now states can oversee AI as they see fit.
• California, Colorado, and Utah have already passed laws that foretell things to come, namely tighter regulation at the state level. California established a definition for AI, and it has another law set to take effect in 2026 requiring companies to share documentation on the data used to train AI models.
• Strict regulations at the state level could have implications for the sector, particularly major AI companies including Microsoft, Alphabet, and Meta. More than 260 legislators from all 50 states raised their concern about the moratorium when it was added to the Senate bill.
• State officials told Congress the provision hindered their ability to protect residents from the possible harmful effects of AI, such as malicious deepfakes and job displacement. Proponents of the provision, however, said inconsistent regulation at the state level could hurt the U.S.’s competitive edge.

What’s Next: Lawmakers also stripped the megabill of a last-minute excise tax on renewable energy projects, giving a boost to solar and wind technology companies like Sunrun, SolarEdge, and Enphase.

— Mackenzie Tatananni

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Constellation Brands Sees Socioeconomic Headwinds to Beer Sales

Alcohol is no longer in vogue, and it’s hurting booze companies like Constellation Brands. On Tuesday, the beer, wine, and spirit seller missed expectations for fiscal first-quarter earnings and sales, saying socioeconomic headwinds had hurt beer sales. It kept its outlook for 2026 but that forecast is lower than 2025.

• Earlier this year, Constellation said Hispanic beer consumers had cut down on dining out and socializing, worried both about the economy and the administration’s immigration crackdown. Organic net sales for the May quarter fell 4% from a year ago, to $2.5 billion. Earnings were $3.22 a share.
• Constellation’s beer business saw net sales fall 2%. But it had six of the top 15 dollar share gaining brands, including Modelo Especial and Corona Extra, in the U.S. beer category, Circana says. Beer net sales are expected to grow up to 3% for fiscal 2026.
• The wine and spirits segment continues to struggle, as net sales dropped 28% from a year ago, partially after selling some underperforming brands. Management expects the segment’s organic net sales to decline 17% to 20% in fiscal 2026.
• Investors worry that consumers are losing interest in alcohol as they opt for healthier, nonalcoholic drinks or cannabis. Younger generations, especially, are drinking less alcohol than their parents. In April, Constellation cut its earnings and sales forecast for the coming years.

What’s Next: Across all categories, Constellation maintained its outlook for fiscal 2026’s comparable earnings of $12.60 to $12.90 a share, a step down from $13.78 a share in fiscal 2025.

— Evie Liu

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Dear Quentin,

I’m 64 and currently live in my daughter’s house with her current boyfriend. She has several health issues, and we have lived together for 10 years. Her health issues are growing, and she has only energy for a highly technical government position and her boyfriend. She has little interest or tolerance for much else, including me.

Her boyfriend buys junk food, energy drinks, alcohol and takeout. He takes out the garbage and works on his sports cars. He tends to his old dog who messes in the house. Nothing more. He offers no rent, and no help with bills. I am now doing all the yard work, house cleaning and maintenance. I do all the real food shopping she and I pay for. I do all the cooking.

There is tension in the house. When I say anything, I am immediately wrong—unless my daughter wants something, and then she’s sickly sweet. OK, I have a small pension of $1,500, Social Security of $900 and spousal support of $1,200 for four more years. When my former spouse, who is 13 years older than me, dies, my income jumps to $3,200 a month.

I have assets, but a patio home in my area would cost me 25% of my assets. I love to garden and have made beautiful gardens where I’m at. My daughter suggests I buy her house as is. It has had no interior updates since the early 1990s. It has old floors and the original windows. It’s 2,400 square feet and two stories.

I love the location, but I question whether it’s too much house for one person. I am currently very fit and have done some professional remodeling, but it really hurts my body. I am dating, but have no interest in cohabitation. My grandchildren are 45 minutes away, but the housing is more expensive and I love my gym that I bike to.

Do I buy her out? Move out soon? Buy a house, or a condo with a yard?

— The Mother

Read the Moneyist’s response here.

— Quentin Fottrell

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—Newsletter edited by Liz Moyer, Patrick O’Donnell, Rupert Steiner