The Federal Reserve, a heavy hitter! Tariffs, a major variable!

Trump's tariff policy variables are still there.

This week, the global market is about to face a series of tests. Among them, the biggest uncertainty comes from the tariff policy of the Trump administration. The United States Court of Appeals for the Federal Circuit (CAFC) will hear the opinions of both parties before June 9, and will decide in the next few days whether to permanently overturn the ruling of the United States Court of International Trade (CIT) to block Trump's "reciprocal tariffs".

At the same time, changes in the Fed's expectations of rate cuts continue to disturb the US stock market. According to the schedule, the US Consumer Price Index (CPI) report for May released on Wednesday may provide clues for the market to observe the future monetary policy direction of the Federal Reserve.

Another highlight this week is Apple's annual developer conference (WWDC 2025), which will kick off on Monday, Eastern Time. Some analysts said that this conference may not be able to dispel the market's concerns about Apple's lagging behind in artificial intelligence, and the updates in AI are limited, and Siri may continue to delay.

Tariff variables

A series of economic data to be released this week and the uncertainty of tariff policies will bring challenges to the US stock market and even bring uncertain risks to the global financial market.

Among them, the biggest variable is undoubtedly the tariff policy of the Trump administration. It is reported that the US Federal Circuit Court of Appeals will hear the opinions of both parties before June 9 and decide in the next few days whether to permanently overturn the US International Trade Court's ruling to block Trump's "reciprocal tariffs".

Looking back, the US Federal Circuit Court of Appeals approved the Trump administration's request on May 29 to temporarily shelve the US International Trade Court's previous ruling prohibiting the implementation of the Trump administration's executive order to impose tariffs on multiple countries under the International Emergency Economic Powers Act.

Analysts said that regardless of the outcome of the ruling, the case may still be submitted to the Supreme Court, thereby delaying the final ruling. The Trump administration earlier told the appellate court that if the ruling prohibiting the implementation of tariffs cannot be quickly suspended, the government will seek emergency help from the Supreme Court as early as the 30th.

In addition, investors are also paying close attention to Trump's "Big and Beautiful" bill, which is being reviewed in the Senate.

Wall Street is assessing how much the legislation will stimulate economic growth, but at the same time is also worried that the bill will further expand the US fiscal deficit. In recent weeks, US fiscal sustainability has become one of the core concerns of the market.

The US Treasury will hold Treasury auctions this week, with $58 billion in 3-year Treasury bonds on Tuesday, $39 billion in 10-year Treasury bonds on Wednesday, and $22 billion in 30-year Treasury bonds on Thursday.

Important guidance from the Federal Reserve

In terms of macro data, the US Consumer Price Index (CPI) report for May, which will be released on Wednesday (June 11), may provide clues for assessing the impact of tariffs, especially in the context of the market's high vigilance against the rebound in US inflation.

Economists generally believe that the US CPI report for May will begin to reflect the impact of tariff policies, and it is expected that the CPI in May will rise to 2.5% year-on-year from 2.3% in April, and the core CPI may rise to 2.9% year-on-year from 2.8% in April.

In the recently released May ISM service PMI, both US business activity and new orders plummeted, while the price paid index soared to a 30-month high, rekindling Wall Street's concerns about the US economy falling into stagflation.

The latest report from the Federal Reserve pointed out that US economic activity has slowed in the past six weeks, hiring has slowed, and consumers and businesses are worried about price increases caused by tariffs.

Alberto Musallem, president of the Federal Reserve Bank of St. Louis, recently made important remarks on the potential impact of tariffs on inflation. He pointed out that tariff measures may push up the consumer price index in the next one to two quarters.

It is reported that Musallem is cautious about the possibility of tariffs causing sustained inflation. He believes that the possibility is "50-50", which means that there is uncertainty about the long-term impact of tariffs on prices.

The May CPI report will be one of the last important data before the Fed's June interest rate meeting. The market generally expects that the Fed will keep interest rates unchanged at this meeting, but traders have begun to bet that the Fed will make two 25 basis point interest rate cuts in the second half of the year.

According to CME's "Fed Watch", the probability of the Fed keeping interest rates unchanged in June is 99.9%, and the probability of a 25 basis point rate cut is 0.1%; the probability of the Fed keeping interest rates unchanged in July is 83.4%, and the probability of a cumulative 25 basis point rate cut is 16.5%.

After the release of the non-farm report last Friday (June 6), economists at Citigroup postponed the expected time of the Fed's next rate cut from July to September.

Jay Woods, global chief strategist at Freedom Capital Markets, said: "If inflation data is milder than the market expects under tariff concerns, then this may also be a catalyst for the US stock market to test historical highs."

Apple's big moment

Another highlight this week is Apple's annual developer conference (WWDC 2025), which will kick off at 1 pm Eastern Time on Monday.

Apple will release redesigned software interfaces for iPhone, iPad, Mac, Apple TV and Apple Watch, and make some minor adjustments to the Vision Pro headset.

The slogan of this conference is "Sleek peek". The media speculates that this may imply that Apple's operating system will usher in an unprecedented visual design change, when iOS 19, iPadOS 19 and macOS 16 will be released together.

Media analysis said that this conference may not be able to dispel the market's concerns about Apple's lagging behind in artificial intelligence. This event will focus more on the design and productivity enhancements of the iOS operating system. The updates in AI are limited, and Siri may continue to be delayed. For developers, the most important AI-related update is that Apple has opened its basic large language model for the first time, allowing third-party developers to build AI functions using the same technology.

After the high-profile release of Apple's intelligence at WWDC 2024, WWDC 2025's strategy in the field of artificial intelligence is expected to show a more cautious and gradual attitude. Especially in the greatly upgraded and smarter Siri, it has been confirmed to be postponed, and the launch time of some core functions may even be until 2026 or later. Therefore, it can be expected that Apple will no longer make overly radical promises at this year's WWDC.