Trump, Xi Reopen Trade Lines — Focus on Rare Earths

President Trump and Chinese President Xi Jinping spoke Thursday in a high-stakes phone call aimed at cooling trade tensions — particularly around rare earth minerals. Both sides agreed to resume trade talks and send top officials to meet again in China on June 9.

The conversation comes after weeks of uncertainty following their May talks in Geneva, where differing interpretations had sparked a new standoff. Thursday’s call helped defuse that, with both leaders inviting each other for visits and calling for more cooperation.

Beijing’s readout was cautious, calling on the U.S. to lift “negative measures.” Trump struck a more upbeat tone, praising his relationship with Xi.

Notably, China granted six-month export licenses to rare earth suppliers that serve the top three U.S. automakers, signaling a practical move toward easing supply chain friction.

The outcome may not be a breakthrough, but with Washington and Beijing back at the table, it’s a step away from escalation — and that’s a win for now.

Coming Soon: Your Delivery Guy Might Not Blink

Amazon is quietly building out what it’s calling a “humanoid park” — an indoor obstacle course at its San Francisco office — to test humanoid robots for package delivery, The Information reports.

The bots, potentially sourced from companies like China’s Unitree and U.S.-based Agility Robotics, would ride inside Amazon’s 20,000+ Rivian delivery vans and, in theory, hop out to drop off packages on foot. Amazon’s own AI software will power them, but it’s leaning on outside hardware for now.

The plan? Train them in controlled environments first, then test them on real routes — likely starting with easy driveways and clean layouts before tackling the chaos of porches with pets and kids.

Amazon already uses warehouse bots and has an autonomous vehicle unit (Zoox), so this could be part of a larger play to automate delivery from warehouse to doorstep. Too soon to panic, but jobs in last-mile logistics could look very different a few years from now.

Japan’s Birth Rate Hits Record Low — Again

Japan just recorded its lowest birth count since it started keeping track back in 1899 — only 686,061 babies were born in 2024, according to new government data. That’s a 5.7% drop from the year before and the 16th straight annual decline.

The country’s fertility rate — now at 1.15 births per woman — continues to lag far below the replacement level of 2.1. For comparison, Japan saw over 2.7 million births in 1949.

Prime Minister Shigeru Ishiba has called the demographic crisis a “silent emergency.” Even with incentives like flexible work policies and rural support programs, the core issue remains: younger generations face a tough combo of rising living costs, stagnant wages, and a workplace culture that’s still hard on women.

Experts say unless Japan finds a way to shift societal norms and offer more tangible support, its population — currently 124 million — could shrink to 87 million by 2070, with 40% aged over 65.

Wells Fargo Is Finally Off the Fed's Naughty List

After seven years under the Federal Reserve’s thumb, Wells Fargo is finally free to grow again. The Fed announced it’s lifting the $1.95 trillion asset cap it imposed in 2018 following the bank’s fake accounts scandal — a punishment that cost Wells an estimated $39 billion in lost profits.

Quick refresher: From 2009 to 2016, Wells Fargo employees created ~3.5 million fake accounts to meet sales targets. The fallout led to industry bans for execs, record fines, and the asset cap that froze the bank’s balance sheet growth.

Since taking over in 2019, CEO Charlie Scharf has slowly rebuilt trust and governance. The Fed says enough progress has been made to lift the cap — though parts of the original enforcement order still stand.

Why it matters: This opens the door for Wells Fargo to compete head-on with rivals like JPMorgan again. Analysts see room for meaningful growth:

• Goldman Sachs: Lifting the cap could boost EPS by 14–19%

• Morgan Stanley: Raised price target from $77 to $87, citing faster loan growth and leaner expenses

Dollar General Gets a Recession-Era Glow-Up

In a turn of fortune that only a shaky economy can deliver, Dollar General just posted a strong Q1, signaling a comeback that even skeptics are starting to believe in. With sales up 5% year-over-year to a record $10.44 billion, the discount chain raised its full-year guidance and saw its stock pop nearly 16%.

Here’s why it matters:
As inflation and tariff pressures push shoppers to stretch their dollars, even higher-income consumers are trading down. Average ticket size rose 2.7%, despite a slight dip in foot traffic. Discretionary categories like seasonal and home goods are drawing new, more affluent customers — a shift that Dollar General is actively leaning into with better merchandising and store remodels.

Behind the scenes, the company is working to keep prices stable, even as tariffs loom. It’s cutting costs with suppliers, optimizing inventory, and managing shrink (i.e., loss from theft/damage) — which improved notably this quarter. Gross margins climbed 78 basis points, helping push earnings per share to $1.78, well above Wall Street’s $1.48 estimate.

The street’s reaction: Analysts across the board bumped up price targets (many to $110+) and praised CEO-led “back-to-basics” efforts, which seem to finally be taking hold after a rocky few years.

Meta Goes Nuclear — Literally

Meta just inked its biggest energy deal yet, signing a 20-year agreement to buy 1.1 gigawatts of nuclear power from Constellation Energy’s Clinton Clean Energy Center in Illinois. The plant’s fate was uncertain, with state subsidies expiring in 2027 — until Meta stepped in.

Though the electricity won’t flow directly to Meta’s data centers, the deal helps the company maintain its 100% clean energy pledge, especially as AI workloads drive up power demand. The purchase will support the Clinton plant’s relicensing and add 30 megawatts of capacity — a win for both Meta and U.S. nuclear longevity.

This marks Meta’s first major nuclear move, following industry-wide interest in atomic energy. With Amazon, Google, and Microsoft all making nuclear bets, the trend is clear: Big Tech sees nuclear as a key tool to future-proof data centers and keep emissions low.

TSMC's Arizona Fab Is Now America’s AI Chip Powerhouse

TSMC’s Arizona facility is quickly becoming the go-to site for next-gen chip production, especially as Apple, AMD, Qualcomm, Broadcom, and soon Nvidia lock in orders for 2nm wafers, priced at a hefty $30,000 each. Despite the steep cost, demand is solid — and Apple still tops the client list.

By year-end, the Arizona plant could reach 30,000 wafers/month, and 30% of TSMC’s sub-2nm output is expected to come from the U.S. That’s a big win for America’s chip ambitions as tech giants prioritize supply chain security.

But it’s not all smooth. TSMC CEO C.C. Wei, in a conversation with President Trump, said completing the chipmaker’s $100B U.S. investment in 5 years would be “very, very difficult” given skilled labor and construction constraints in Arizona. Trump’s reply: “Mr. Wei, do your best, that’s enough.”

Wei also dismissed any hype around a Middle East expansion: “Do you think it’s possible to have customers in the Middle East?... From what I can see, it’s not that easy to build up a semiconductor industry there.”

And when it comes to AI dominance, Wei made it clear: “All AI customers have to work with us.”

Translation? If you're building AI chips at scale — you're working with TSMC.

Circle Debuts Big

Circle (CRCL), the firm behind stablecoin USDC, made a blockbuster debut this week, surging 168% from its $31 IPO price to close at $83.23. At its peak, shares hit $103.75, signaling that investor appetite for crypto-linked plays is heating back up — especially under a more crypto-friendly Trump administration.

After four years of false starts, the timing couldn’t be better. Circle raised nearly $1.1 billion, pushing its valuation to around $18.4 billion (or $21.4B on a fully diluted basis). It now trades on the NYSE under the ticker CRCL.

Circle is the #2 stablecoin issuer, trailing Tether’s $153B USDT with USDC’s $61.5B market cap. But analysts see room to grow — especially if tighter regulation levels the playing field. Circle is also expected to lean more into payments and settlements to diversify revenue beyond crypto trading flows.

Data Center Death Was Wildly Exaggerated

Remember back in Feb/March when analysts were sounding the alarm on a “data center slowdown” after a handful of firms started canceling leases? Yeah, that narrative hasn’t aged well.

This week alone tells a different story:

• Microsoft is investing $400M into expanding its data centers in Switzerland.

• Amazon announced a $10B investment in North Carolina to grow its AI infrastructure, bringing 500 jobs and powering the next wave of AWS.

• And just days ago, Amazon also committed $5B+ to a new Taiwan cluster, launching a brand-new Asia Pacific region for AWS.

Here’s What Else Happened This Week

• Sanofi is buying Blueprint Medicines for $129/share in cash, valuing the deal at $9.1B upfront and $9.5B including CVRs. Ayvakit’s 60%+ YoY growth and rare disease pipeline add a major boost to Sanofi’s oncology portfolio.

• Samsung is nearing a deal to preload Perplexity AI on Galaxy S26 phones, while Apple is also in talks to bring Perplexity’s search to iPhones—potentially replacing both Google in Safari and OpenAI in Siri.

• India finalized its new EV import policy—but Tesla opted out of local manufacturing, leaving space for Mercedes, VW, Hyundai, and Kia to move in.

• Meta plans to fully automate ad creation with AI by 2026, allowing brands to simply upload a product photo and budget—everything else will be handled by Meta’s platform.

• SpaceX is building an advanced chip packaging fab in Texas, using industry-first 700mm substrates to support Starlink’s projected $15.5B in 2025 revenue.

• $HIMS is acquiring European telehealth firm ZAVA, marking a major entry into the UK, France, and Germany. Deal is fully in cash and expected to be accretive by 2026.

• OPEC+ is raising oil output by 411K barrels/day in July, matching prior months—less than feared and viewed as market-stabilizing.

• OpenAI surpassed 3 million paying business users

• Amazon is testing humanoid delivery robots in a "Humanoid Park" inside its SF office, aiming to pair them with Rivian vans for last-mile automation.

• Moderna’s next-gen COVID vaccine got U.S. approval, but only for those 65+ or high-risk teens.

• Trump signed a new executive order reprioritizing U.S. cybersecurity, focusing on foreign threats and post-quantum encryption while eliminating digital ID requirements for immigrants.

• Trump signed a new drone and airspace security executive order, lifting the U.S. ban on overland supersonic flights and fast-tracking electric air taxis, advanced drones, and FAA noise rule updates ahead of the World Cup.

• Disney is laying off several hundred employees across production and corporate finance, part of its ongoing cost restructure.

• Victoria’s Secret postponed earnings after a May cyberattack, warning of lingering Q2 costs.

• Joby signed a $1B MOU with Saudi Arabia to deploy air taxis starting in 2026, including aircraft sales and training programs.

• Procter & Gamble to cut 7,000 office jobs globally, trim its brand portfolio, and exit select categories amid slowing consumer demand.

• Apple’s AI launch in China faces delays, as regulators stall on partnership approvals with Alibaba.

• Robinhood crossed $250B in AUM, posted sharp jumps across trading activity, and now has over 3M people on its credit-card waitlist.

• Nintendo’s Switch 2 sold out instantly, with Japan seeing 2.2M lottery entries for early access and U.S. preorders vanishing within 2 hours.

• Microsoft laid off another 300+ employees, after 6,000 earlier this year, citing continued restructuring.

• Uber appointed Mac Macdonald as President & COO, its first COO since 2019, signaling a streamlined global ops push.

• Walmart is expanding drone delivery to 100+ new stores, now active across five states and offering 30-minute delivery for over 150K products.

• ARK Invest disclosed a 4.64% stake in Archer Aviation (ACHR), now holding 25.45M shares.

• Tesla’s Optimus robot division head Milan Kovac is exiting, with veteran Ashok Elluswamy taking over leadership.

TRUMP–MUSK BROMANCE IS OVER:

What started as a high-profile partnership between two of the most powerful men in business and politics has now unraveled into a full-blown public spat—with major market consequences.

President Trump and Elon Musk clashed this week over the GOP’s “One Big Beautiful Bill,” which Musk slammed for gutting the EV tax credit. In response, Trump hinted at cutting government contracts to Musk’s companies—SpaceX being the biggest recipient. That threat alone helped erase $150 billion from Tesla’s market cap in a single day, marking its worst trading session ever.

While Musk tried to cool the temperature later, calling for unity “for the good of the country,” the damage was done. Trump told NBC flatly: “I would assume so, yeah” when asked if their relationship was over—and warned of “very serious consequences” if Musk backs Democratic candidates.

Behind the scenes, the Pentagon and NASA are reportedly already taking contingency steps, reaching out to Rocket Lab, Blue Origin, and Stoke Space to reduce reliance on SpaceX, per WAPO.

Meanwhile, Tesla’s investors are still in the crosshairs. Trump’s tax proposal would kill the $7,500 EV credit and potentially block California’s gas car ban—moves that could slash more than $3 billion a year from Tesla’s profits, according to JP Morgan. On top of that, federal regulators are turning up the heat on Tesla’s self-driving program, a core part of its long-term valuation.

EARNINGS BITE:

AVGO
Broadcom delivered an inline quarter but set the Street abuzz with a bullish AI trajectory. AI-related revenue surged +46% YoY to ~$4.4B, with Q3 guided to $5.1B and full-year AI growth expected at +60% for FY25 and FY26. That optimism drove PT hikes across the Street—Rosenblatt to $340, BofA to $300, and Mizuho to $310. Demand from META, GOOGL, and ByteDance is ramping, and custom ASICs and Ethernet remain key strengths. Gross margins dipped slightly due to mix, but FCF could top $31B this year. Consensus: AVGO is cementing its position as a top AI infra play, even amid short-term margin noise.

LULU
Lululemon’s Q1 beat was quickly overshadowed by a cautious FY outlook, driven by tariffs and sluggish international comps. Management cut FY EPS guidance to $2.85–$2.90, triggering a sharp -20% stock reaction. China comps (+8%) missed expectations, and inventory rose +23% YoY. While some analysts like Evercore and BTIG call the selloff overdone and see valuation support near $255, others like Jefferies remain bearish, citing weak U.S. trends. The bull thesis hinges on execution, pricing power, and international acceleration—none of which are firing on all cylinders yet.

TTAN
ServiceTitan crushed it. Q1 results topped expectations, Q2 guidance came in strong, and FY guidance was raised meaningfully. Platform growth +27% YoY, bookings strength, and improving profitability fueled upgrades—KeyBanc and Needham lifted PTs to $140. Even more telling: the FY26 guide was raised aggressively, reflecting longer-term confidence. Bears point to a slight subscription deceleration, but bulls call that noise. Despite a post-earnings dip, most agree TTAN is a durable SaaS grower with margin upside, ideally positioned for commercial trade digitization.

DOCU
DocuSign posted a mixed quarter—revenue, margins, and EPS were solid, but billings missed and the FY guide was cut. IAM traction and 101% NRR provided some bright spots, but early renewal softness weighed. JPMorgan called it “penalty box” territory, while Evercore saw the reaction as overdone. IAM now accounts for just ~4% of direct customers, underscoring its nascent impact. Most analysts hold a wait-and-see stance, with shares likely range-bound until billings visibility improves and go-to-market changes settle.

CRWD
CrowdStrike’s quarter showed solid momentum beneath a noisy surface. ARR rose +22% YoY to $4.44B, and NNARR topped expectations at $194M, but revenue was flat and Q2 guidance missed slightly due to CCP-related accounting drag. Profitability, meanwhile, remained strong, with operating margins and FCF ahead of targets, and FY27 targets raised to 24% OpInc and 30%+ FCFM. Falcon Flex deals surged past $3.2B in total contract value, with signs of customers “re-flexing” early.

The setup remains compelling into 2H with easier comps and acceleration in platform adoption (Cloud, SIEM, Identity), but at ~20x sales and ~64x EBITDA, the stock offers little room for error. Fundamentals are top-tier, growth remains high-quality, but sentiment may cool unless ARR keeps stepping up and revenue re-aligns.

HPE beat modest Q2 expectations ($0.38 EPS vs $0.32 est; $7.63B rev vs $7.46B), but AI orders lagged ($1.1B vs Dell’s $12.1B). Juniper deal pending, but slower growth in Servers/Storage and AI gaps may cap upside vs peers like Dell.

Week Ahead:

With all the uncertainty around tariffs, the focus has now shifted to the deficit—and that’s stirred up some tension between Trump and Elon Musk. This is definitely going to make more headlines in the coming weeks, especially with all eyes on the “big beautiful bill.”

Looks like it’s shaping up to be an eventful week. I’ll be sharing updates as things unfold over on Twitter: @wallstengine.