Here is the statement that President Trump posted today. He accused China of "lying" and imposing export controls on rare earth metals. Trump cancelled his meeting in 2 weeks with China's President Xi and said "massive" tariff increases are coming. So, what does it all mean?

Rare earths have been very important for Trump. Between a Ukraine deal and the US-China trade war, Trump has prioritized rare earths. These metals are CRUCIAL for the production of weapons, chips, AI, and strategic leverage. The US gets ~70% of its rare earths from China.

When the first US-China trade deal was signed on May 12th, rare earths were a critical component. Now, President Trump claims that China is attempting to impose export controls on these metals. The market collapsed on this headline on fears of the trade war returning.

But, we believe the market is in a VASTLY different situation now than in April 2025. It is clear now more than ever that the trade deal is becoming largely focused on China. We believe today's statement is a bargaining chip. As a result, we think this dip will be BOUGHT.

It's also worth noting that most of the tariff news is priced-in. The US effective tariff rate still stands at 17.3%, the highest since 1935. Markets have known this for months now and the rally was technically overbought. We view today's Trump post as a "reason" to selloff.

Meanwhile, Fed rate cuts will resume as the labor market clearly deteriorates. Underemployment is at 8.1%, the highest since 2021. All while 60% of items in CPI inflation are now rising by at least 3%. As we continue to reiterate, asset owners will continue to be rewarded.

On top of this, the AI Revolution is accelerating at an unprecedented pace. Magnificent 7 companies are investing over +$100B in CapEx PER QUARTER. AI now accounts for ~40% of S&P 500 CapEx spend. We believe fighting this unprecedented level of investment is dangerous.

Then, you have the USD rapidly declining, now down over -10% YTD. This puts the USD on track for its worst annual performance since 1973. As seen since 2021, nominal asset prices are strong in this macroeconomy backdrop. Again, our view is that asset owners WILL be rewarded.

That said, we think the market will be taking a more "bumpy" road higher into year-end. Trade war fears are resurfacing, Fed uncertainty remains, and the government is shut down. All while the S&P 500 is up +34% in 6 months, a move only seen 10 previous times since 1930.

Change is the only certainty in markets today - investors must adapt to it. The macroeconomy is shifting and stocks, commodities, bonds, and crypto are investable. Want to receive our premium analysis? Subscribe to access our premium analysis below: http://thekobeissiletter.com/s...

Overall, we believe the return of a prolonged trade war is highly unlikely. Tariff headlines are near-term noise amid the AI Revolution and rate cuts into inflation. We believe asset owners will be rewarded. Follow us @KobeissiLetter for real time analysis as this develops.

@KobeissiLetter If we’ve learned anything from April tariffs… 📈

@Zeff_Pena Correct. This is a bargaining move by President Trump.

@KobeissiLetter Ahh... Trump is just throwing his weight around. The AI trade is not a leavered to China given Xi shutting out $NVDA. The AI/Datacenter trade is all a domestic affair. Yes, it's the new Cold War but the Capex and economic consequences have very little to do with China trade.

@KobeissiLetter Wrap is up, it’s over

@KobeissiLetter He needs a dip to load up again guys, simple! TACO

@KobeissiLetter Dude it’s down 1.5%. Chill out. Nothing has happened.

@KobeissiLetter I’ll admit my longs all liquidated. We win some and we lose some. Can’t say I could have predicted this one. My guess is that it’ll dive a bit more. Buckle up folks. It’s not buy time just yet, but it’s coming! For many holding, keep your conviction. The market always goes up!

@KobeissiLetter Just a pullback brother We’re up 53% since the April lows 😊 Nothings changed

@KobeissiLetter “Trump canceled the meeting.” China says Xi Jinping did not want to speak with Trump. Which is much more credible than Trump's claims.

@KobeissiLetter The Donald Dump is back on!

@KobeissiLetter Today's -1.77% drop is only 30% as severe as April's crisis, when $SPY bottomed at $496 then rallied +18.4% in 36 days 📊 $SPY still just -1.65% from ATH with 6.1% cushion to support. Vol at 0.57x average = market barely flinched vs April panic 📈

@KobeissiLetter no need to read all that... just focus on the fundamentals. this is just pure short term noise that shouldn't distract the good investor from his/her convictions.

@KobeissiLetter Trump's Trade Casino just hit another jackpot—$1.2 trillion vanished in 40 minutes. The house always wins when markets become gambling chips for tariff roulette. This isn't volatility—it's systemic arson. The S&P's 1.2% plunge today follows 7 tariff postponements since April,

@KobeissiLetter Strangely gold is holding well 😳

@KobeissiLetter Canada has all the rare earth minerals the US could ever want...time to make a deal with your strongest ally.

@KobeissiLetter Wild moves

@KobeissiLetter The trade War playbook is back online in an instant!

@KobeissiLetter Let’s repeat April or worst 🥳🤞🏻

@KobeissiLetter What should we buy ?

@KobeissiLetter @grok based on the information, which would be the better play at hand. Stocks that mine Rare earth elements or stocks that refine and process Rare earth elements. Provide information and data to support both arguments and clearly define a beat option.

@KobeissiLetter Once the VIX hits 30, sell it and buy NVDQ. Easy.

@KobeissiLetter This is not a buying opportunity !! Be Risk aware

@KobeissiLetter Manipulating criminal!

@KobeissiLetter Just the $1.2 trillion📉

@KobeissiLetter Markets are wild today. $1.2t wiped out in 40 minutes. Definitely one of those moments that makes you question if it's a dip to buy or just chaos