Key Takeaways
- Stellantis (STLA) has reportedly halted the development of its battery-electric full-size pickup trucks, a significant pivot attributed to weak market demand for these specific EV models.
- The 10-year/30-year Treasury yield curve has recorded an unprecedented number of bear steepening days over the past two years, indicating persistent inflation concerns and expectations for higher long-term interest rates.
- Geopolitical tensions continue to simmer, with Israel's Iron Dome intercepting a Houthi missile over Eilat, while Ukrainian President Volodymyr Zelensky reiterated a firm stance against ceding any territory to Russia.
- U.S. President Donald Trump's arrival in the UK for discussions with Prime Minister Keir Starmer introduces a layer of political and trade uncertainty, with past visits highlighting issues like migration and trade deals.
Automotive Sector Shifts Focus from EVs
In a notable development for the automotive industry, Stellantis (STLA), the parent company of Ram, has reportedly ceased the development of battery-electric full-size pickup trucks. This decision comes amid weak demand for these vehicles, signaling a potential recalibration of EV strategies within the sector. Previously, Stellantis had already delayed the launches of its electric Ramcharger and Ram 1500 REV models to 2026 and 2027, respectively, citing sluggish sales observed across the industry, including for rivals like Ford and General Motors.
The company's focus appears to be broadening, leveraging its STLA Frame platform to support a variety of powertrain options, including internal combustion, hybrid, and hydrogen systems, rather than exclusively battery-electric vehicles. This strategic shift by Stellantis could have significant implications for the electric vehicle market, potentially impacting investment and future product pipelines across the industry.
Treasury Yields Signal Enduring Inflationary Pressures
The U.S. bond market is grappling with a prolonged period of bear steepening in the 10-year/30-year Treasury yield curve, which has seen a record number of such days over the last two years. This phenomenon, where long-term yields rise faster than short-term yields, suggests that investors anticipate enduring inflationary pressures and believe the Federal Reserve will maintain higher interest rates for an extended period.
The 30-year Treasury rate has been nearing the 5% mark, with some analysts predicting a potential surge towards 5.5%. This trend is being driven by a combination of factors, including a buoyant economy, persistent inflation expectations, and concerns over U.S. fiscal pressures and rising global rates. The widening spread, which reached 65 basis points between the 30-year and 10-year Treasuries, underscores the market's re-evaluation of long-term economic outlook and monetary policy.
Geopolitical Hotspots Remain Active
Geopolitical tensions continue to be a significant factor for global markets. In the Middle East, Israel's Iron Dome air defense system successfully intercepted a Houthi missile over the southern city of Eilat. This incident is part of an ongoing series of Houthi attacks targeting Israel and Red Sea shipping, escalating regional instability and impacting global trade routes. Previous interceptions have involved both the Iron Dome and the longer-range Arrow 3 missile defense system, with attacks often linked to broader regional conflicts.
Meanwhile, the conflict in Eastern Europe remains at an impasse, with Ukrainian President Volodymyr Zelensky firmly stating that "giving Putin any part of Ukrainian land is not a solution, only a pause — it will not happen." This unwavering stance signals a continuation of the conflict, with ongoing implications for global energy markets and defense spending.
Adding to the complex international landscape, U.S. President Donald Trump has arrived in the UK for discussions with Prime Minister Keir Starmer. While details of this specific visit are emerging, past meetings in 2025 have covered critical topics such as trade deals, the conflict in Gaza, and the situation in Ukraine. These high-level political engagements carry potential for shifts in international alliances and trade policies, which could influence market sentiment.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.